Report: SEC Has Its Eye on Elon Musk's Brother

Kimbal Musk sold $108M in shares the day before Elon Musk posted Twitter poll
By Rob Quinn,  Newser Staff
Posted Feb 25, 2022 4:31 AM CST
Report: SEC Is Taking a Close Look at Musk Brother's Trades
Tesla and SpaceX Chief Executive Officer Elon Musk speaks at the SATELLITE Conference and Exhibition in Washington, Monday, March 9, 2020.   (AP Photo/Susan Walsh, File)

(Newser) – In November, Elon Musk sold Tesla shares worth billions of dollars after polling Twitter users about the move. The Securities and Exchange Commission is now taking a close look at stock sales made by his brother, Kimbal Musk, a day before the poll was posted, the Wall Street Journal reports, citing "people familiar with the matter." Kimbal Musk sold 88,500 shares worth a total of $108 million the day before his brother's tweet, per the Journal. Tesla shares dropped sharply after Elon Musk confirmed his plan to sell 10% of his stake in the company, and they have not returned to the same level since. The share price largely recovered after an initial drop but it has fallen by around a third since the start of the year.

Kimbal Musk is on Tesla's board of directors and the sale could have violated insider trading law, though the question of whether Elon Musk's plan was company information or personal information "would be a hard-fought question in court," and one that Elon Musk "would be willing to spend a little bit" to address, University of Michigan law professor Adam Pritchard tells the Journal. The reported investigation is a new front in Elon Musk's long-running battle with regulators, the Guardian reports. Last week, Musk and Tesla accused the SEC of carrying out an "endless" and "unrelenting" investigation as retaliation for Musk's criticism of the regulator.

Musk hasn't commented on the Journal's report since it was published, but earlier this week the CEO and his attorney accused the SEC of leaking information about an upcoming investigation. "The SEC leaked confidential information to the WSJ, deliberately violating federal law," Musk told CNBC. "We found out about this because, in their eagerness to gain a scoop, WSJ jumped the gun and inquired about it with Tesla before, rather than after, SEC publication." (Read more Elon Musk stories.)

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