- 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.
Isn’t that the definition of insider trading? Lock him up like Martha, she did way less and served time in a prison resort.
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.
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.
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.
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
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.
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
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.
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?
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.
Felon Musk
“Felonious Musk” might be a good nickname.
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
I love how resort is tacked on there at the very end. Like you read it in a quiter voice.
Can we revoke his government contracts now?
Can we deport him now?
Dude, you can’t talk about deporting people back to Africa. Not cool.
No, that’s counterproductive because the government uses those services. Instead, the government could confiscate his stock in those companies.
SpaceX would probably be more profitable if they didn’t have to spend so much time and resources on preventing Musk from interfering with things.
It’s mostly Tesla and Twitter that he’s wrecking, but yeah Shotwell does sometimes rescue SpaceX from terrible ideas he has, like canceling Falcon Heavy.
Twitter was wrecked with the purchase, it’s been on borrowed time since. The business is now worth less than the $13bn loan it took out to buy itself on Musk’s behalf. It was a leveraged buyout, just like every business that goes under after “being saddled with debt”.
Would be nice to have SpaceX be independent of him.
Martha Stewart this motherfucker.
So… i vaguelly knew about her so did some searching
she served five months in federal prison for fraud and was released in March 2005. There was speculation that the incident would effectively end her media empire,[2] but in 2005 Stewart began a comeback campaign[3] and her company returned to profitability in 2006.[4] Stewart rejoined the board of directors of Martha Stewart Living Omnimedia in 2011[5] and became chairwoman of her namesake company again in 2012
Its pretty mild isn’t it?
except they wont even do that to musk. Nobody wants to try a billionaire in court, musk is known to send armies of private detectives on people. He’ll close a factory in your district out of spite. Billionaires are afraid of taxes because as long as they have way too much money they can continue to do the illegal shit that made them rich.
And she got street cred, and hangs out with snoop dog now lol.
Oh wow! Was that her with the lighter commercial for Bic?
Didn’t notice before now!
Love the idea of two of them only one has served time.
That title is a very long way of saying that he’s been accused of inside trade
That’s called Insider Trading, and is supposed to be illegal.
America
its only illegal if youre dumb enough to not be paying judges and politicians. its not even a lot of money either like a couple thousand and theyll vouch for you
What a joyous year if we could get Trump and Elon in jail this year… They could be roomies!
Neither of them are going to prison. Trump’s judge explicitly said as much during his 10th contempt citation, and Musk has been pissing on the leg of the SEC for the last five years straight with no consequences.
So you’re saying they’re never getting their comeuppance?
Not under a Biden government, no
Please no, we don’t need them plotting together in jail
Would be a pretty funny “prison break esque” movie though.
The key to escape is Donald’s tiny hands can reach things other prisoners hands are to big for.
And Elmo creates the perfect diversion by convincing every other prisoner to invest in prison coins, only to pump and dump em causing a riot.
Used to be you pull this shit (insider trading) and be locked away for life. Times they 'r a changing, indeed.
I don’t know about life. Martha Stewart got 5 months (and some house arrest and probation after that).
Martha Stewart was convicted for lying and obstruction, not insider trading.
Insider trading seems to have been perfectly legal for the last few decades. Nothing will come of this or it would start setting precedent that we could use against our government leaders and other billionaires and federal judges. Not gonna happen.
Punish him daddy
When are Tesla shareholders going to wake up and understand that he’s scamming them. You’re all dupes and he’s going to ride you to the last second and let you all burn.
They are accepting his request to give him 50b$ worth of extra stock, at the same time as they are laying off people. What a joke.
… WHAT’S New in Capitalism…
🫠
So wait, is it OK to do INSIDER TRAIDING now?
Well not for me and you. I have worked for public traded companies before and they would announce blackout periods where we weren’t able to sell. Since we worked inside the company and knew stuff the general public wouldn’t.
Part of the many reasons why I won’t do another 401k and instead use a Roth.
What does a Roth vs 401k have to do with any of this? I buy index funds in both accounts, nothing to do with company stock programs whatsoever.
… and nothing will happen.
Wouldn’t that volume for sale appearing on the market decrease the price in and of itself?
Oh NOOOOO! So you might point at this genius brain to tell us, he’s just another fraudster? NOOOOoooooo! Who whould have thought? /s
