Securities Law News

Tesla Investors Take Securities Claims Against Musk to 9th Cir.

Aug. 22, 2019, 3:26 PM

Tesla Inc. shareholders will ask the Ninth Circuit to reinstate their claims against Elon Musk for alleged short-swing insider trading profits from buying SolarCity, a solar energy firm founded by his cousins.

A federal trial court dismissed the claims in July, finding Musk can’t be sued under federal securities law for short-swing profits he allegedly made by selling shares he acquired through a stock-for-stock exchange with SolarCity. The shareholders filed their notice of appeal on Aug. 21.

The Securities Exchange Act bars officers and directors from profiting on “short-swing” trades—purchases or sales of stock within a six-month period.

Musk didn’t...

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