May 24, 2022

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Elon Musk and his brother under investigation for allegations of insider trading | Tesla

The US Securities and Exchange Commission has reportedly opened an investigation into whether the recent stock sales by Tesla CEO Elon Musk He and his brother Kimbal Musk violated the rules of insider trading.

Securities and Exchange Commission inquiry – first reported by The Wall Street Journal Thursday Partly because of the Tesla CEO’s tweets.

It centers on an incident last year when Kimball, a member of Tesla’s board of directors, sold $108 million of shares in the electric car maker. The exchange happened just a day before Musk polled Twitter users asking if he should divest his 10% stake in the company. Teslasend the stock back down.

The Securities and Exchange Commission issued a subpoena to Tesla 10 days later on November 16 for additional financial information.

Insider trading laws prohibit employees and board members from trading based on non-public information about the company. The investigation will likely focus on whether Kimball sold his shares because Elon told him about the survey in advance.

The investigation escalates Musk’s battle with regulators as they scrutinize his social media posts and Tesla’s treatment of workers, including accusations of discrimination.

Last week, Tesla and Musk accused the Securities and Exchange Commission of harassing them with an “endless” and “relentless” investigation to punish Musk for being an outspoken critic of the government.

This isn’t the first time Musk’s tweets have caused trouble with regulators. Musk first faced SEC retaliation for his online activity in 2018 Tweeted He intended to take over Tesla and obtained “secured financing”. The Securities and Exchange Commission ruled that Musk’s tweets were misleading and imposed further censorship of his social media activity.

In 2019, the Securities and Exchange Commission in 2019 asked a federal judge to hold it Musk in contempt from that agreement to send an inaccurate tweet. Musk on Thursday, in response to the latest investigation, a promise He was “building a case”.

“I didn’t start the fight but I will finish it,” he said on Twitter. The Securities and Exchange Commission, Tesla and Kimball Musk did not immediately respond to requests for comment.

Tesla shares rose about 1% in the late afternoon, paring losses amid a broader stock market rout.

The stock has fallen about 33% since Musk began selling billions of dollars in stock on November 8, just days after the poll in which 58% of voters asked him to sell.

Reuters contributed to this report.

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