Elon Musk accused of insider trading
Elon Musk accused of insider trading

The Wall Street Journal reported that the Securities and Exchange Commission is investigating whether Tesla CEO Elon Musk and his brother Kimbal Musk violated insider trading rules in their recent stock sales. Street Journal.

Insider trading d. h. The trading of shares or other securities of a publicly traded company by anyone with access to non-public company information is illegal because it is considered unfair and will make more profit than the average investor.

The investigation began after Elon Musk and his brother sold $108 million worth of Tesla stock late last year.

The sale comes a day before Elon Musk is polled on whether to sell his 10% stake in the company, which he has pledged to pursue.

Elon Musk described the sale as a way to cover any amount he might incur if Congress imposes a new tax on unrealized capital gains.

Of the more than 3.5 million participants, 57.9% voted yes and 42.1% voted no. The results of the survey showed that Tesla's stock has fallen sharply.

The newspaper reported that Tesla board member Kimbal Musk had sold 88,500 shares the day before his brother was released.

Insider trading laws prohibit employees and managers from trading undisclosed information.

Under the 10b5-1 program, employees and managers can avoid insider trading fees by trading at set times.

Kimball Mask has used this program in the past. Since 2011, she has disclosed 40 times that she has traded shares in the 10b5-1 program.

But the disclosure of the shares he sold prior to his brother's Twitter poll on November 5 did not indicate he was using the software.

Elon Musk accuses committee of leaking information

The paper reports that regulators may be investigating whether Musk told his brother about the investigation or a possible sale before Kimball Musk sold his shares on November 5.

Musk has been at war with the Securities and Exchange Commission for some time. He accused the authorities of conducting endless and baseless investigations against him and his company.

He also alleged that the agency failed in its obligation to distribute a $40 million fine to Tesla shareholders under the 2018 settlement.

He claimed that the agency released information related to the federal investigation in retaliation for his public criticism. However, no concrete evidence was presented to support his claim.

The controversy stems from Musk's 2018 tweet about his intention to make Tesla private. It was announced at the time that funding had been secured.

Following Musk's tweet, the Securities and Exchange Commission launched an investigation. The conclusion is that Musk misled investors about his plan to take Tesla private.

A year later, Tesla and the committee agreed that Musk's tweets about Tesla deserved further scrutiny.

His tweets about the company's financials, sales, or shipping numbers must be pre-approved by the company's attorney. Except for other specific issues.

In February 2019, the Securities and Exchange Commission asked a federal judge in direct contempt of Musk. This was due to an inaccurate tweet that said it violated the terms of the agreement.

Musk tweeted at the time that Tesla could produce about 500,000 Model 3s this year. These numbers stand in sharp contrast to the company's official forecast of delivery of between 360,000 and 400,000 vehicles in 2019.

Musk also said the Securities and Exchange Commission is trying an unconstitutional takeover. Although the agency said the Tesla CEO had flagrantly violated the regulations.

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