Tesla CEO Elon Musk is being sued by his investors because his tweets are affecting the stock market, according to a new filing.
Tesla investors filed a lawsuit in the Delaware Chancery Court on Thursday accusing Musk of making tweets that are manipulating stock prices. The lawsuit asked the court to file an order that would allow the plaintiff, David Wagner, to seek internal documentation from the company concerning whether Tesla mismanaged its responsibility for Musk's tweets.
Musk "has made multiple social media posts which have adversely affected [Tesla's] stock price and may have violated certain agreements with the U.S. Securities and Exchange Commission and applicable law," the lawsuit claimed.
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The lawsuit pointed specifically at Musk's November poll on Twitter, where the Tesla CEO asked whether he should offload his Tesla stock.
The lawsuit also argued Musk is not being watched adequately by the company's leaders, who agreed to regulate Musk's tweeting in 2019.
"It is unclear who at Tesla, if anyone, is currently reviewing Musk's tweets," the lawsuit argued, adding that Tesla's last full-time general counsel left in December 2019 and the most recent acting general counsel stepped down in April.
Wagner's lawsuit echoed a similar filing in March 2021 that claimed Musk violated his fiduciary duty to Tesla by sending "erratic" tweets while the board failed to intervene.
After a monthslong conflict about his tweets, Musk and the SEC came to an agreement in April 2019 in which Musk would not be allowed to tweet about subjects that may affect Tesla's financial status. These subjects included "nonpublic legal or regulatory findings or decisions," as well as any topic the company may request.
The SEC argued in June 2021 that Musk may have violated these rules when he tweeted about Tesla solar roof production volumes and its stock price.
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Musk's use of Twitter has also affected the values of companies he does not own, causing plunges and surges in value in the short term among several cryptocurrencies.
Time magazine declared Musk the 2021 Person of the Year on Monday.