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The SEC is looking into whether the Tesla CEO’s and his brother’s recent stock trades “violated insider-trading regulations.” The SEC investigation began last year after Kimbal sold 88,500 Tesla shares worth $108 million, “one day before the Tesla CEO polled Twitter users asking if he should unload 10% of his stake in the electric-car maker and pledging to abide by the vote’s results.”
Following Elon Musk’s poll on Twitter asking if he should sell his interest in Tesla, the US’s top financial watchdog is said to have begun an inquiry into him and his brother Kimbal for insider trading.
Kimbal, who also serves on Tesla’s board of directors, has traded Tesla shares regularly as part of a strategy.
According to reports, the authorities will investigate if Musk informed his brother about the poll or prospective sale before Kimbal sold his shares on November 5, “or if Kimbal elsewhere learned about the poll and then traded.” Since early November, when he surveyed Twitter followers about selling 10% of his investment in Tesla, Musk has sold more than $16 billion worth of stock.
SEE ALSO: Elon Musk Offers $5,000 To A Teenager To Delete His Twitter Handle; Here’s Why
“Given the recent focus on unrealized gains as a form of tax evasion, I recommend selling 10% of my Tesla shares,” he had written. Musk claimed he was “creating a case” against the SEC in a tweet late Thursday, adding, “I didn’t start the fight, but I will finish it.”
The SEC accused Musk of making “false and misleading” claims to investors in September 2018, after Musk announced on Twitter in August that he had secured enough funds for a major private purchase of Tesla at $420 per share. The price fluctuated throughout the month, and the agreement Musk hinted of never materialized.
As part of a new settlement deal negotiated with the carmaker and CEO in 2019, Musk and Tesla each had to pay $20 million in fines, and Musk was compelled to stand down as Chairman for at least three years. Musk (through his lawyers) accused the US Securities and Exchange Commission (SEC) of leaking information about a federal probe in revenge for his outspoken criticism of federal financial authorities earlier this week.
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