SEC Investigates Elon Musk and His Brother for Insider Trading According to a report, the investigation began over a tweet Elon Musk made.
By Chloe Arrojado Edited by Amanda Breen
The Securities and Exchange Commission (SEC) is investigating Elon Musk and his younger brother Kimbal Musk for insider trading, according to the Wall Street Journal. According to the report, the SEC began investigating last year after Kimbal Musk sold 88,500 shares (worth $108 million at the time) of Tesla shares a day before Mr. Musk polled Twitter users asking whether he should sell 10% of the company's stock.
Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.
— Elon Musk (@elonmusk) November 6, 2021
Do you support this?
Company officers or directors like Kimbal Musk, who's on Tesla's board of directors, can avoid insider trading charges by using 10b5-1 trading plans. These plans allow company insiders to buy or sell shares at set intervals. The WSJ found that Kimbal Musk often used the 10b5-1 plan in his filings, but the November sale did not indicate that a 10b5-1 plan was used.
Related: Elon Musk Reignites Feud With Sen. Elizabeth Warren: 'Maybe I Can Have a Cookie or Something'
The SEC has not commented on the investigation. However, Elon Musk told the Financial Times that Kimbal had "no idea" of the Twitter poll in advance.
Elon Musk's combative nature towards the SEC is well documented. Earlier this month, Musk's lawyer Alex Spiro accused the government body of trying to "chill" Musk's "exercise of First Amendment rights" in regards to another Twitter incident under SEC investigation.
"The SEC seems to be targeting Mr. Musk and Tesla for unrelenting investigation largely because Mr. Musk remains an outspoken critic of the government," Spiro wrote in a letter to the U.S. District Court for the Southern District of New York earlier this month.
As of Friday morning, Tesla stock is up 0.11% over a 24-hour period.
Related: Elon Musk Doubles Down on Criticism of President: 'Biden Has Pointedly Ignored Tesla at Every Turn'
