Elon Musk, his brother under US SEC probe for insider trading

Elon Musk and his brother Kimbal Musk are being investigated by the US Securities and Exchange Commission (SEC) for allegedly breaking insider trading regulations with recent stock trades.

According to the Wall Street Journal, the SEC is looking into whether the Tesla CEO's and his brother's recent stock trades "violated insider-trading rules."

The SEC investigation began last year after Kimbal sold 88,500 Tesla shares worth $108 million, "one day before the Tesla CEO polled Twitter users asking if he should unload 10% of his stake in the electric-car maker and pledging to abide by the vote's results," according to a report released late Thursday.

Kimbal, who also serves on Tesla's board of directors, has traded Tesla stock on a regular basis as part of a larger strategy.

According to the newspaper, the regulators will investigate if Musk informed his brother about the poll or potential sale before Kimbal sold his shares on November 5, "or if Kimbal elsewhere learned about the poll and then traded."

Since early November, when he surveyed Twitter followers about selling 10% of his investment in Tesla, Musk has sold more than $16 billion worth of stock.

"Given the recent focus on unrealized gains as a form of tax avoidance, I propose selling 10% of my Tesla stock," he had written.

Musk said he was "creating a case" against the SEC in a tweet late Thursday, adding, "I didn't start the fight, but I will finish it."

The SEC charged Musk with making "false and misleading" claims to investors in September 2018, after Musk announced on Twitter in August that he had secured enough funds for a major private purchase of Tesla at $420 per share.

The stock fluctuated throughout the month, and the agreement Musk hinted at never materialized.

As part of a new settlement agreement negotiated with the automaker and CEO in 2019, Musk and Tesla each had to pay $20 million in fines, and Musk was compelled to step down as Chairman for at least three years.

Musk (through his lawyers) accused the US Securities and Exchange Commission (SEC) of leaking information about a federal investigation in revenge for his outspoken criticism of federal financial authorities earlier this week.

Musk wrote the letter after alleging that the SEC was harassing him by constantly probing him and "seeking to limit his freedom to free speech." The current stock price of Tesla shares as of 25th February 2022 is $809.87.