Feb 24 (Reuters) – The U.S. Securities and Exchange Commission is investigating whether Tesla Inc’s recent stock sales… (TSLA.O) CEO Elon Musk and his brother Kimbal Musk ‘violated insider trading rules,’ WSJ mentioned On Thursday, according to people familiar with the matter.
According to the report, the investigation began last year after Kimbal sold shares in the electric car maker worth $108 million, a day before Musk polled Twitter users asking whether he should divest his 10% stake in Tesla.
Kimbal Musk was unaware of the Twitter poll that accepted him, Elon Musk Tell The Financial Times in an email, adding that his lawyers are “aware” of the survey.
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An earlier settlement with the SEC required that his public statements about the company’s finances and other topics be scrutinized by its legal counsel.
The Securities and Exchange Commission issued a subpoena on November 16, ten days after the Musk poll, for information relating to certain financial statements.
A picture of the Tesla logo at the groundbreaking ceremony for the Tesla Shanghai Gigafactory in Shanghai, China, January 7, 2019. REUTERS / Aly Song / File Photo
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The potential investigation will escalate Musk’s battle with regulators as they scrutinize his social media posts and Tesla’s treatment of workers, including accusations of discrimination.
Last week, Musk accused the Securities and Exchange Commission of harassing him and Tesla through an “endless” and “relentless” investigation to punish him for being an outspoken critic of the government. Read more
Elon Musk’s November stock sales were executed automatically according to the trading plan he laid out on September 14, and showed a file revealing stock sales, including stock options that were supposed to expire in 2022.
Tesla 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. Read more
Tesla and Kimbal Musk did not immediately respond to Reuters requests for comment. A spokesman for the Securities and Exchange Commission declined to comment.
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Additional reporting by Akash Sriram in Bengaluru; Edited by Magu Samuel
Our criteria: Thomson Reuters Trust Principles.
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