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According to a source, Elon Musk and his brother are being investigated by federal officials on suspicion of insider trading.
The SEC is investigating Musk over a tweet he wrote in November 2021 in which he asked his followers if he should sell Tesla stock, the Wall Street Journal reported.
According to the Journal, Musk's brother Kimbal Musk sold 88,500 Tesla shares for $108 million the day before the tweet. Musk's supporters advised him to sell, and he did. Tesla's shares plummeted in the aftermath of the post.
Kimbal Musk is also a member of Tesla's board of directors. According to the Journal, he usually trades Tesla shares according to a preset strategy that protects him from insider trading claims. According to the SEC, Kimbal's large trade the day before Elon's tweet was not part of that strategy.
It's not the first time Elon Musk and federal authorities have clashed over the eccentric CEO's tweets.
Musk asserted in August 2018 that he could transform Tesla into a private corporation and that he has the funds to do it. Tesla's stock swiftly rose as a result of such a move, which would result in a big payoff to investors.
Musk was probed by the SEC, who decided that the tweet constituted fraud. Shortly later, the matter was resolved, resulting in a $20 million fine for Musk personally and a $20 million punishment for Tesla as a corporation. Musk has also agreed to stand down as Tesla's chairman for the time being.
Musk's net wealth is believed to be more than $225 billion, thus the $20 million punishment equated to around $10.82 for the typical individual.
In another tweet, Musk slammed the SEC, saying, "Just want to (say) that the Shortseller Enrichment Commission is doing excellent job." And the name change is so on point!” He still wasn’t over it two years later, tweeting: “SEC, three letter acronym, middle word is Elon’s.”
SEC, three letter acronym, middle word is Elon’s
— Elon Musk (@elonmusk) July 2, 2020
As of Thursday evening, Musk had not tweeted about the latest reported investigation. Last week, he complained about what he called the regulator’s “unrelenting investigation” of himself and Tesla.
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