ACCORDING TO A REPORT, the SEC is investigating Elon Musk and his brother for alleged insider trading.ACCORDING TO A REPORT, the SEC is investigating Elon Musk and his brother for alleged insider trading.

Elon Musk and his brother, Kimbal Musk, who sits on the boards of Tesla and SpaceX, are being investigated by the US Securities and Exchange Commission. According to The Wall Street Journal, which cited anonymous sources, the SEC is investigating whether Tesla CEO Elon Musk and his brother broke insider trading regulations.

Last November 5, Kimbal Musk sold $108 million in Tesla stock, a day before Elon Musk asked Twitter followers if he should sell 10% of his Tesla stock, and eventually sold almost 2 million shares. Following the Twitter survey, Tesla stock fell in value.

The Securities and Exchange Commission is investigating whether Elon Musk informed Kimbal Musk about the impending Twitter vote before he sold his shares. In February 2021, Kimbal Musk reportedly sold $25 million in Tesla stock at $852 per share, the highest price until October.

According to the Journal, the filings for Kimbal Musk’s stock trades did not state that he employed a 10b5-1 plan to sell. To prevent insider trading charges, Rule 10b5-1 of the Securities Exchange Act of 1934 permits substantial shareholders of a firm to sell a specified amount of their shares at a predetermined period.

The Securities and Exchange Commission (SEC) declined to comment. On Thursday, Elon Musk allegedly told the Financial Times that his brother had “no clue” he would undertake the Twitter poll. Tesla does not have a public relations staff to handle requests for a response.

“Building a case is precisely what I’ve been doing,” Musk responded to a Twitter user who claimed Musk had been gathering evidence claiming SEC wrongdoing while under investigation by the agency for years. “I didn’t start the battle, but I’m going to see it through.”

Elon Musk accused the SEC of waging a “harassment campaign” against him and Tesla over a 2018 settlement earlier this month. After Tesla disclosed that the SEC issued a subpoena to the company in November 2021 seeking information on Tesla’s compliance with the settlement, a lawyer for Musk claimed in a letter to US District Judge Alison Nathan that the SEC is targeting Musk with “unrelenting” investigations in an attempt to “chill his exercise of First Amendment rights.”

According to the Journal, the SEC responded by noting that its letter to Musk and Tesla on their compliance is in line with the court’s expectations.

Following a court struggle over Musk’s tweet in 2018 in which he said he was contemplating taking Tesla private, the settlement was reached, with Musk and Tesla each paying $20 million. In addition, Musk was sued by the Securities and Exchange Commission (SEC) for making “false and misleading” claims.

Musk and other billionaires, like Amazon CEO Jeff Bezos, made their fortunes by arranging their compensation in a way that minimizes income and allows them to pay nearly no federal tax, according to a report released last year.

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