3 ms·
> The plaintiffs...assert that Mr. Musk’s actions were responsible for the losses they suffered on Tesla’s stock movements. So what law are they actually asser
by ssalka 4y ago
> The plaintiffs...assert that Mr. Musk’s actions were responsible for the losses they suffered on Tesla’s stock movements.
So what law are they actually asserting that Musk broke? That a CEO is incentivized to act in the interest of the company's shareholders? Honest question, what specific laws come into play here - is it about stock manipulation?
Also, can what happened be legally considered as a "loss" if an investor never cashed out? AFAIK, that would make it an unrealized loss, analogous to unrealized gains which typically don't officially result in any net change until the asset is sold.
- scottlawson 4y agowhen you are the CEO or anyone considered to have "material non public information" there are a lot of SEC restrictions on what you are allowed to reveal publicly about your company.
- deleted 4y ago[deleted]
- RandomBK 4y agoSecurities and Exchange Act of 1934, Section 10b-5 [1]. You'll commonly see this shortened to just "10b-5" in common parlance. There's quite a large industry [2] involving lawsuits anytime someone can credibly claim that an executive knew or (the real kicker) should have known they were making a false statement. The vast majority of cases settle - there's rigorous and standardized models for computing how much to settle for. The special thing in this case is how it's actually gone to trial. [1] https://www.investopedia.com/terms/r/rule10b5.asp https://www.investopedia.com/terms/r/rule10b5.asp [2] https://securities.stanford.edu/ https://securities.stanford.edu/ Edit: The specific case here is https://securities.stanford.edu/filings-case.html?id=106701 https://securities.stanford.edu/filings-case.html?id=106701 (Docket 18-CV-04865)