Tesla and CEO Elon Musk face a new lawsuit over Musk’s social media posts. The suit alleges that Tesla and Musk violated an agreement the US securities regulator and its board members failed to adhere to fiduciary duties.
This lawsuit surrounds the tweets and Twitter poll by Musk asking if he should sell 10% of his stock.
The conversation surrounded the CEO’s unrealized gains being a means of tax avoidance.
However, in terms of taxation, Musk is in a unique situation as he does not take a salary or bonus from any of his companies, so the only way for him to pay personal taxes is to sell stock.
Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.
Do you support this?
— Elon Musk (@elonmusk) November 6, 2021
The lawsuit seeks to obtain records and books related to Musk’s tweets about selling stocks. The lawsuit further wants the documentation to identify if the tweets were reviewed or pre-approved in advance.
Back in 2018, Musk settled a lawsuit by the Securities and Exchange Commission over his tweet on taking the company private. Musk agreed to have the company’s lawyers pre-approve tweets with material information about the company.
It is not clear if Tesla shareholders lost money because the CEO sold off a portion of his stocks. The stock is +202.80 for the year and was above $1,000 per share throughout November.
Source: Reuters
