Watchdog launches investigation into Elon Musk and brother over alleged insider trading
The US’s top financial watchdog has reportedly launched an investigation into Elon Musk and his brother Kimbal over insider trading, after the Tesla boss held a poll on twitter asking if he should sell off his stake in the firm.
The investigation from the Securities and Exchange Commission (SEC) was sparked by the Tesla boss’s tweet in November consulting followers whether he should sell off his 10 per cent Tesla stake, the Wall Street Journal first reported.
Musk’s brother Kimbal, who sits on Tesla’s board, offloaded $108m of shares in the firm just one day before Musk opened the poll, and the watchdog is looking into whether he had prior knowledge of the poll.
Musk’s tweet sent the electric car marker’s share price plummeting, and the investigation is likely to look into whether Musk warned his brother in advance.
The watchdog subpoenaed Musk 10 days after the poll to gather further financial information.
Reports of the investigation come after Musk attacked the SEC last week for pursing Tesla with an “endless” and “unrelenting” investigation due to his critical views of the US government.
Musk has had several run-ins with regulators over his twitter activity. In 2019, the SEC asked a judge to hold Musk in contempt over an inaccurate tweet, and in 2018 he said he tweeted he was preparing to take Tesla private and had secured funding.
Musk said he was building a case in response to the SEC’s most recent case.