SEC To Investigate Kimbal Musk Stock Sale

(RTTNews) - The US SEC is currently probing into the insider trading of Tesla Inc. (TSLA) CEO Elon Musk and his brother Kimbal Musk for possible violations of rules. The SEC is looking into the movement of Kimbal Musk's stock in the company before Elon famously announced the sale of 10% of his stock in the car manufacturer. According to reports, Musk has denied any sort of wrongdoing on his or his brother's part. Referring to Steven Buchholz, he told the FT that this investigation is "simply more evidence of Stevie grinding his very tiny axe yet again." Buchholz is the SEC staff who is behind the probes against Tesla and Musk. Earlier on Monday, Musk's legal team filed a complaint against the investor watchdogs claiming that the SEC has leaked information about the probe. However, the types and extent of the said leaks were not confirmed. According to the Journal, Kimbal Musk has sold 88,500 shares of Tesla from which he has received $109 million. The sale coincided with Musk's tweet on November 6th where he asked his followers about selling 10% of his stock in the company. Tesla stock drops significantly during the period. Musk sold his stock only to exercise his buy-back options so that he can save the high rate of taxes on stock. What has been the point of the probe is that had Kimbal sold his stock at the same time or after Musk's "organized frenzy", he would've received less from the proceeds. According to insider trading rules, one should not exercise options to sell the stock with insider knowledge of how the stock will move. Musk, in his interview with FT, dismissed the links and said, "Kimbal had no idea I was going to do a Twitter poll. The idea that I would care about whether my brother might sell shares for a few million dollars less when my Twitter poll caused my own share sale to be over a billion dollars less is utterly absurd."

Musk sold 15.7 million stock for $16.40 billion during this time and bought back 22.9 million shares. Apart from paying taxes, Musk has also donated a $5.7 billion sum an untraced enitity.