Electric car making company Tesla hit by lawsuit over tweets by CEO Elon Musk
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Famous for making eye-popping statements on social media, Musk had asked in a poll on Twitter if people thought he should sell 10 percent of his stake in Tesla
Electric car producer Tesla has been hit by a lawsuit because of tweets by CEO Elon Musk.
Famous for making eye-popping statements on social media, Musk had asked in a poll on Twitter if people thought he should sell 10 percent of his stake in Tesla.
In the poll, almost 58 percent of the 3.5 million votes cast were in favor of him proceeding with the sale.
Now, Tesla investor David Wagner has accused Musk of violating an agreement with the US securities regulator.
He believes the company's board members failed to adhere to their fiduciary duties and has filed for access to internal documents to investigate the matter at the Delaware Court of Chancery.
Under a September 2018 settlement with the US Securities and Exchange Commission, Musk was required to step down as chairman and pay $20 million to settle charges he defrauded investors with false claims on Twitter about the possible go-private transaction that was quickly aborted.
Musk, who is the world's richest person, has sold just over 934,000 shares in Tesla, according to documents filed with US stock regulators. They were worth about $14 billion.
Wagner alleges that Tesla shares, which had hovered near record-highs, lost their value by about a quarter after the irresponsible tweets made by Musk.
Analysts said the 50-year-old South African billionaire's stock sale will be liable for capital gains tax of at least $1.4 billion.
His tweets followed a proposal by US Congressional Democrats to tax the super-wealthy more heavily by targeting stocks, which are usually only taxed when sold.
(With inputs from agencies)