The recent Tesla share sales have raised doubts about whether Elon Musk and his brother Kimbal Musk violated regulations with respect to insider trading. SEC is investigating to find the truth amid concern that he might have told his brother about planned selling by asking Twitter followers to sell the stocks. This led to Kimbal selling 88,500 shares before the tweet.
Elon tweeted on November 6 and Kimbal sold his shares on November 5. The move is a gesture of breaking rules and barring the employees from trading.
Kimbal has frequently practiced trading of Tesla shares as his own trading strategy and it is not something suspicious about trading on November 5, said an SEC filing.
No official statement has been issued either from Tesla or SEC, but Elon earlier said he will finish the legal battle that has been started by the SEC. It seems he is not on friendly terms with the SEC.
The investigation is believed to further add tension as the two are not on good terms since 2018 following the action of SEC against Musk over his frequent tweets about taking the company private. Elon had agreed on a settlement and it included the approval requirements for financially relevant posts on Twitter. However, the fight didn't wrap up with the settlement.
SEC has been keeping a close look at the tweets of Elon thereafter over concerns about production-related unapproved tweets. Elon simultaneously accused SEC frequently on public platforms of conducting a harassment campaign against him. However, the commission denied such accusations.
The truth is yet to be revealed and it can be presumed that the Tesla CEO may not embrace any more new investigation gladly. The legal battle may continue longer and over a period of time.
Elon Musk Overview
Elon is one of the richest business tycoon and entrepreneur in the world. He is Tesla and SpaceX chief executive officer. He founded The Boring Company and simultaneously co-founded OpenAI and Neuralink. His net worth in 2021 was around $224 billion and presently is the wealthiest person in the world.
Tesla was incorporated in 2003 by Marc Tarpenning and Martin Eberhard. In early 2004, Elon led the Series A round of investment and invested $6.5 million in the company. He joined the board of directors as chairman and oversaw Roadster product design.
The company first built an electric sports car in 2008 and the first lot sales were about 2,500 units.