Musk Faces Shareholder Suit Saying Twitter Takeover Harmed Tesla

Elon Musk violated his duty to Tesla Inc. shareholders by selling Tesla stock and diverting Tesla resources in his effort to acquire the social media platform then called Twitter, a new shareholder derivative lawsuit claims.

The Employees’ Retirement System of Rhode Island sued Musk, Tesla, and Tesla board members Monday in Delaware’s Chancery Court alleging that Musk became distracted from Tesla duties by his determination to own Twitter, creating conflicts of interests and hurting Tesla’s bottom line.

The retirement system says Musk and his brother, board member Kimbal Musk, concealed from shareholders that Musk sold $16 billion in Tesla stock ...