Investment
SEC Investigates Elon Musk and Brother For Insider Trading
The Securities and Exchange Commission is investigating Tesla CEO Elon Musk and his brother on suspicion of insider trading. This pertains to a November 2021 tweet made by Elon that asked followers if he should sell Tesla stock.
RELATED: Elon Musk Pushes Dogecoin Over Bitcoin When Buying Things
Elon Musk Asked Twitter Followers If He Should Sell Tesla Stock
A day before the tweet, Kimbal Musk, Elon’s brother, sold 88,500 Tesla shares worth $108 million.
Want to see the full article?
Click here to read the full article on breakingnewsalerts.com
Afterward, when Elon’s followers responded “yes” on whether he should sell his stock, he did so. Consequently, Tesla stock prices went down after his tweet.
Kimbal sits on Tesla’s board of directors. He usually trades Tesla stock that he owns using a predetermined plan. This plan prevents Kimbal from being accused of insider trading charges.
However, the SEC determined that Kimbal’s trade prior to Elon’s Twitter survey was not part of that plan.
Instead, the agency believed that Elon might have told Kimbal about his Twitter plans. This might have led the other Musk to unload some of his shares outside of his usual schedule.
SEC, Elon Musk At Odds Over His Tweets
Elon Musk’s current brush with the SEC is not the first, nor will it be his last. The Tesla CEO is notorious for going on social media to announce controversial statements that attract the attention of the SEC.
Last August 2018, Musk tweeted that he might turn Tesla into a private company. As this plan can lead to a massive payout for stockholders, Tesla share prices immediately surged higher.
As a result, the SEC flagged Tesla and began an investigation into possible market manipulation. The agency determined that Elon’s tweet counted as fraud, especially since Tesla never made moves to privatize.
Consequently, Musk paid a $20 million fine, while Tesla also shelled out another $20 million. Musk’s net worth at the time was at $225 billion.
This means that the $20 million fine he paid was equivalent to $10.82 for the average American. In addition to the fine, Musk also agreed to temporarily step down as CEO of the electric vehicle company.
Musk Used Twitter To Ask Followers If He Should Sell Tesla Stock
The latest investigation involved Elon Musk’s strange Twitter poll last November. Prior to the tweet, Senator Ron Wyden (D-OR), proposed an annual tax on investments held by America’s billionaires.
This marks a change from the current setup, where the government only taxes investments during the time of sale.
Meanwhile, Elon Musk vehemently opposed the proposal. He also took the exception that billionaires like him are allegedly avoiding paying higher taxes. He took to Twitter to ask his followers.
“Much has been made lately of unrealized gains being a means of tax avoidance,” he tweeted. “So I propose selling 10 percent of my Tesla stock. Do you support this?”.
Musk added a poll to record the eventual vote. It ended with 57.9% in favor of Musk selling some of his stock, which he promptly did.
Critics, however, said that Musk planned to sell his stock at that time anyway, regardless of the voting. He was due for newer stock options at the time, and he can only finance his new options by selling old stock.
Watch the Yahoo Finance video reporting that Tesla CEO Elon Musk and his brother are the focus of SEC insider trading probe:
Loading ...Do you think the SEC has an ax to grind against Elon Musk? Or, is Elon Musk a victim of his own need to validate himself on social media?
Tell us what you think about the ongoing feud between a billionaire CEO and the SEC. Share your comments below.
You Might Also Like:
- Will Economic Sanctions Work Against Russia This Time?
- Citi To Eliminate Overdraft Fees And Insufficient Funds Charges
- Russia Vows To Strongly Retaliate Against To US Sanctions
Keep up to date with the latest finance news by following us on Facebook and Instagram.
