Yahoo Finance Elon Musk and brother face insider trading probe over Tesla shares sale
Elon Musk and his brother are being investigated by US regulators over recent sales of Tesla shares, according to the Wall Street Journal.
The Securities and Exchange Commission is examining whether the electric car maker’s chief executive and Kimbal Musk violated insider trading rules, according to unnamed sources quoted by the newspaper.
The SEC’s investigation began last year after Mr Musk’s brother sold almost 90,000 shares worth $108m, one day before Elon Musk asked Twitter users if he should sell some of his stake in Tesla.
Tesla shares fell sharply following the Twitter poll, with 58pc of voters telling him to sell. Spokesmen for the SEC and Tesla did not respond to requests for comment from the Journal.
The report comes as Elon Musk ramped up his war with US regulators, saying he is “building a case” against the SEC.
Mr Musk, the world’s richest person, wrote: “I didn’t start the fight, but I will finish it.”
He has been immersed in a years-long battle with the regulator over his aborted attempt to take the electric car maker private in 2018.
The controversy saw Mr Musk step down as Tesla chairman and led to both him and the company paying a $20m (£15m) fine.
Mr Musk has in recent days accused the SEC of leaking information about US government investigations into Tesla, claiming the regulator is retaliating against his frequent public criticism of it.
Last week he filed a legal complaint against the agency, accusing it of a “harassment campaign” of “endless, unfounded investigations”.
On Monday, Mr Musk’s lawyer wrote: “It has become clearer and clearer that the commission is out to retaliate against my clients for exercising their first amendment rights.”
In response to a tweet about the situation on Wednesday night, Mr Musk wrote: “Building a case is exactly what I’ve been doing.”
Earlier this month, it emerged that the SEC had issued Tesla with a subpoena demanding information about its compliance with the 2018 settlement.
Under the settlement, Mr Musk’s closely watched tweets are meant to be reviewed by a Tesla lawyer if they contain market-sensitive information.
The SEC had privately claimed Mr Musk had violated the settlement on two previous occasions, although it has not penalised the company for doing so.
Mr Musk has poked fun at the regulator, calling it the “Shortseller Enrichment Commission” in reference to investors who have bet against Tesla shares.
Earlier this week, he praised the US department of justice for investigating short sellers and said it “was something the SEC should have done, but curiously, did not”.
Since Mr Musk’s infamous 2018 post on Twitter saying he had “funding secured” to take Tesla private at $420 a share, Tesla’s value has exploded and made it the world’s most valuable car company.
The Securities and Exchange Commission did not comment.
