Tesla Whistleblower: Ex-Manager Accuses Elon Musk of Possible Insider Trading

What is Musk thinking?
Elon Musk’s Twitter saga still has no ending in sight. Kevork Djansezian/Getty Images

Another day, another Tesla whistleblower.

Sean Gouthro, a former manager at Tesla’s Global Security Operations Center & Investigations at its Nevada Gigafactory, has filed a complaint with the SEC with new information regarding CEO Elon Musk’s explosive tweet last August about taking Tesla private.

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On August 7, 2018, Musk tweeted that he had fundings secured to take Tesla private for $420 per share. The company stock was traded at $342 that day, before his tweet sent it to soar over 15 percent in just minutes.

In his tip to the SEC, Gouthro alleged that “the purported planned transaction to take Tesla private at that price was known and discussed internally by many at Tesla days before the subject tweet, and that many were suspect of the purported deal’s legitimacy,” said his attorney, Stuart Meissner.

That means those Tesla employees with knowledge of the privatization plan could have used the opportunity for insider trading, given the dramatic stock price movement during that time.

“If Gouthro’s claim is accurate, it obviously opens up many to be able to [perform insider trading] if they chose to—not something most legit companies would want to happen,” Meissner told Observer in an email.

In addition, Gouthro’s SEC tip corroborated the allegations brought up by another former Tesla employee named Karl Hansen in a separate SEC complaint that Tesla had spied on employees and covered up theft of $37 million worth of raw materials in the Gigafactory.

Gouthro was Hansen’s supervisor during his time at Tesla. Hansen was also represented by Meissner.

Gouthro worked at Tesla from December 2017 to December 2018. In a statement to Observer, Tesla said Gouthro was let go for poor performance, including “repeated failure to demonstrate and understand best practices in the security industry.”

“In August 2018 and in September 2018, Mr. Gouthro was interviewed by a Tesla compliance attorney as part of an internal investigation into some of the very issues he is now bringing forward, and he raised absolutely none of the concerns he has now brought to the media,” said a Tesla spokesperson. “Like the claims of Mr. Meissner’s other clients, Mr. Gouthro’s allegations are untrue and sensationalized, only intended to seek the attention of the media.”

Meissner said Gouthro was involved in many of Tesla’s internal investigations during his time there, including the company’s post-firing interaction with former Tesla employee Martin Tripp, who accused Tesla of misstating production numbers in an SEC tip filed last July.

Tripp, a former process engineer at Tesla’s Nevada factory, was let go in June 2018 and was subsequently sued by Tesla for stealing trade secret and providing false information to the press. As part of the lawsuit, Tesla sought $1 million in damages. But in December last year, Tesla raised the damage claim to $167 million, based on dips in Tesla’s stock price in the prior months supposedly caused by Tripp’s public bashing of Tesla.

Tripp is currently defending the case in federal court in Nevada. Meissner represented Tripp in his tip to the SEC, but not in the ongoing lawsuit with Tesla.

Tesla Whistleblower: Ex-Manager Accuses Elon Musk of Possible Insider Trading