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Elon Musk and brother Kimbal being investigated for insider trading

Elon Musk and brother Kimbal being investigated for insider trading
Elon Musk  |  Photo Credit: Reuters
25 Feb, 2022
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US Securities and Exchange Commission (SEC), is reportedly investigating Elon Musk and his brother Kimbal Musk for allegedly involving in insider trading practices, according to a Wall-Street Journal report.  

SEC officials suspect that Elon might have told Kimbal that he planned to ask his Twitter followers about selling some Tesla stocks, which prompted Kimbal to sell 88,500 shares of Tesla, a day before Elon tweeted on November 6. 

“Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock,” Elon Musk said in a Twitter poll. Further asking his followers if they support his move to sell 10% of the stocks he owned in Tesla. Around 58% of his followers said yes.  

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SEC suspects Elon might have told Kimbal considering the fact that Kimbal had frequently traded Tesla stocks at regular intervals according to a fixed plan, But on November 5, he did not trade Tesla stocks according to plan, according to an SEC filing.  

This isn’t the first time that Elon has had problems with the SEC. In 2018, SEC had taken action against Elon for tweets where he spoke about taking Tesla private.  

The two went to court and Elon eventually agreed to a settlement for the tweets. The tweets mentioned that Elon had the money to take the company private, and investigations by SEC proved that he didn’t.

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SEC charged musk with providing false information that impacted Tesla stocks. Since then the SEC has been closely scrutinising Elon’s tweets. He had also accused SEC publically of running an “harassment campaign” that he alleged singled him out unfairly. In a writing to a district court. 

The Tesla CEO accused the SEC of breaking a promise to pay Tesla shareholders $40 million as part of its 2018 settlement case. He said that SEC had instead devoted its resources into “endless, unfounded investigations” into Tesla and himself.