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The SEC is investigating Tesla’s inventory market transactions through Elon Musk and his brother violating insider trading rules, according to the Wall Street Journal.
Kimbal Musk sold $108 million in Tesla inventory a day before Elon asked his Twitter fans if he would sell 10% of his stake.
Tesla’s inventory fell 12% after the Twitter survey, and Elon then sold shares worth $16 billion.
Elon Musk’s rivalry with the Securities and Exchange Commission is expected to grow after a Wall Street Journal report revealed that the firm is investigating inventory sales through Musk and his brother.
The SEC is investigating whether Tesla’s stock sales through Musk and his brother, Kimbal Musk, violated insider trading rules, according to the report, bringing in other people familiar with the matter.
The investigation began last year after Kimbal unloaded $108 million in Tesla inventory just a day before Elon asked his Twitter fans if he sold 10% of his stake in Tesla to pay taxes, WSJ said.
The Twitter poll, which was released on Saturday, Nov. 6, garnered millions of votes overwhelmingly in favor of Musk promoting a portion of his stake in Tesla. Kimbal sold his Tesla percentages on Friday, Nov. 5. Tesla’s percentages fell 12% on Monday. Nov. 8, when investors digested a closing percentage sale through Elon.
Kimbal stored about $18 million through the promotion of 88,500 Tesla shares the day before Elon’s Twitter poll, to promote near lows on Nov. 8. Elon would continue to sell more than $16 billion in Tesla stock, according to SEC filings.
What emerges is whether Kimbal sold his Tesla shares after being informed through Elon of the ballot he planned to tweet or whether he planned to sell shares. Kimbal is a member of Tesla’s board of directors.
The SEC’s investigation into Kimbal and Elon may end without the company making formal allegations of wrongdoing, according to the WSJ report. Tesla did not respond to a request for comment from Insider.
Company members can prevent you from the occurrence of transactions on private data by adopting a 10bfive-1 business plan, which sets predetermined periods for percentage insider sales. it did not come with the mention of a 10bfive-1 plan, according to SEC filings.
Tesla has had a long-standing dispute with the SEC since Elon received a fraud investigation similar to its $420 per share “secure funding” tweet in 2018. Part of Tesla’s settlement with the SEC similar to this investigation required the company to review Elon’s tweets. Tesla and Musk also agreed to pay $40 million in fines, and Musk had to leave the company as chairman.
In a court filing earlier this month, Musk’s lawyers argued that the tweet secured through the investment was completely true because the company had to go through Saudi Arabia’s private. Earlier this week, Musk’s lawyers accused the SEC of leaking information similar to an investigation into Musk.
Read the article on Business Insider