• Elon Musk accused of illegally selling $7.5 billion in Tesla stock in Q4 2022.
  • Lawsuit alleges Musk and board violated fiduciary duties by selling shares ahead of disappointing vehicle sales data.
  • Shareholder seeks disgorgement of $3 billion in illegal gains and damages from directors for reckless behavior.
  • The Pantser@lemmy.world
    link
    fedilink
    arrow-up
    284
    arrow-down
    1
    ·
    5 months ago

    Isn’t that the definition of insider trading? Lock him up like Martha, she did way less and served time in a prison resort.

    • CraigeryTheKid@lemm.ee
      link
      fedilink
      English
      arrow-up
      54
      arrow-down
      3
      ·
      5 months ago

      I need to look up how “insider trading” even works.

      When you are the CEO, and you make decisions, and you own your own stock - wouldn’t everything you ever do be with insider info? It is just honor system pinky-promise to act in good faith? I mean that sounds super effective.

      • teletext@reddthat.com
        link
        fedilink
        arrow-up
        110
        arrow-down
        1
        ·
        5 months ago

        Normally you publicly say looong in advance, like at least half a year in advance, that you plan to sell this amount of shares at this point in time. No more, no less, not earlier, not later, no backsies.

        • Warl0k3@lemmy.world
          link
          fedilink
          arrow-up
          62
          ·
          edit-2
          5 months ago

          Well no, there is backsies. You can rescind your intent to sell within a couple days. What most CEOs do is set up regular sells every month way in advance, then choose not to sell unless its opportune at the last minute. If that sounds like it completely defeats the purpose of the rule in the first place, yep! The system is rigged.

          • CleoTheWizard@lemmy.world
            link
            fedilink
            English
            arrow-up
            17
            ·
            5 months ago

            Wouldn’t say completely. The notice of intent to sell is not there to prevent CEOs from selling when they want to, it’s to notify you that they could sell this much if they wanted to.

            The purpose is just to say that you need to be prepared for a potential sale. If the CEO keeps backing out of a sale, that does hurt your ability to predict when they will but not how much they could sell and therefore how much those sales could potentially affect your investment.

            All of that is strategic because otherwise investors could conceivably do the opposite and sell before the CEO is forced to sell and then buy his shares at a lower price. That would mean the stock would tank every time the CEO went to sell. The problem exists because most of the solutions are even worse

            • Warl0k3@lemmy.world
              link
              fedilink
              arrow-up
              5
              ·
              5 months ago

              That’s a fair point, thank you! I was mostly commenting because that rule gets brought up every time someone talks about insider trading (and musk specifically) as a defense and it’s deeply irritating. It makes sense the rule is more about not hobbling CEO investment than insider trading since it really doesn’t do much to prevent the latter.

            • theneverfox@pawb.social
              link
              fedilink
              English
              arrow-up
              4
              arrow-down
              1
              ·
              5 months ago

              The problem exists because most of the solutions are even worse

              Everything you said makes a lot of sense, but this drives it home… The stock market is so unbelievably ridiculous. It’s just unmanageable, it’s such a simple idea with such horrible effects it might be a great filter

      • Aurenkin@sh.itjust.works
        link
        fedilink
        arrow-up
        51
        ·
        5 months ago

        At my workplace we are only allowed to sell stocks within certain windows, usually it’s a brief period immediately after we publicly release earnings. I think for higher ups it’s even more restrictive.

        • NotMyOldRedditName@lemmy.world
          link
          fedilink
          arrow-up
          22
          ·
          edit-2
          5 months ago

          We had a 2 week window 2 or 3 days after earnings were released.

          Edit: You could preschedule sales though like recurring once a month, but it wouldn’t take effect immediately. I can’t remember what the delay on that was, but it might have been starting after the next earnings?

        • EnderMB@lemmy.world
          link
          fedilink
          arrow-up
          3
          ·
          5 months ago

          I’ve known people at IC level sell outside of windows and barely get a mention. Some people have odd vesting schedules for things like RSU’s, so sometimes it’s unavoidable.

          At higher levels, it’s locked down considerably. My old director said that he had to have a meeting to go through a sale of his stock, so that it could be approved to be out of a window of potential releases in the company outside of his own division. I imagine that at VP+ level you need accountants just to handle what is a few clicks for an average corp worker.

      • Johanno@feddit.de
        link
        fedilink
        arrow-up
        19
        ·
        5 months ago

        That’s only the 5th time he commits fraud. He has been at court several times because of his actions. It seems no one really wants to arrest him

        • jaybone@lemmy.world
          link
          fedilink
          arrow-up
          3
          arrow-down
          3
          ·
          5 months ago

          He should run for president. He can claim the long form version of his birth certificate says he was born in Hawaii.

    • exanime@lemmy.today
      link
      fedilink
      arrow-up
      19
      arrow-down
      1
      ·
      5 months ago

      Yes but you see, he is a billionaire… Insider trading and other laws are for the pauper rich

    • jaybone@lemmy.world
      link
      fedilink
      arrow-up
      2
      ·
      5 months ago

      I love how resort is tacked on there at the very end. Like you read it in a quiter voice.