Elon Musk and his brother under investigation for alleged insider trading
Tesla CEO Elon Musk and his brother, Kimbal, are under investigation by the Securities and Exchange Commission (SEC) for alleged insider trading, the Wall Street Journal reported.
In November last year, Elon had put out a Twitter poll asking his followers if he should sell off 10 percent stock in Tesla to pay taxes. The Tesla stock that was on an upward trend until then, tanked sharply after this tweet. Interestingly, Kimbal, who is also a member of the board at Tesla offloaded 88,500 shares a day prior to this tweet, WSJ reported.
The SEC is investigating the possibilities of whether Elon had told Kimbal about putting up the tweet or if Kimbal knew about it and traded his stock before the prices drop. Both of these instances violate insider trading rules and could attract fines for one of the Musk brothers and possibly Tesla, too.
Not the first time
This is not the first time that Elon has had a run-in with the SEC. In 2018, the SEC charged him with civil securities fraud with Tesla, CNBC reported. A year later, the SEC, Musk, and Tesla reached an agreement where Musk agreed to relinquish to post of chairman in Tesla for a period of three years and also paid a fine of $20 million. While Musk could not claim innocence for the charges, the settlement did not allow him to be pronounced guilty as well. Tesla also paid a $20 million fine to settle the issue.
However, Musk has continued to target the SEC with the most recent allegation of harassing him with "unrelenting investigations".
In the light of the WSJ report, through his lawyer, Musk told CNBC that the SEC had violated federal law by revealing details of an ongoing investigation to WSJ in retaliation to his criticism of financial regulators. Even though the SEC had not put details of the investigation in the public domain, the WSJ report did. The media outlet has refused to reveal its source for the story.
As always Musk took to Twitter to state that his spat with SEC would not be perpetual.
I didn’t start the fight, but I will finish it.— Elon Musk (@elonmusk) February 23, 2022
We now need to wait for Musk's next move.
Musk has separately sold off billions worth of his Tesla stock in installments ever since. Those sales are not part of the investigation.
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