Elon Musk has denied passing information that could have hurt Tesla’s stock price to his brother Kimbal, after a report that both men have become the subject of an insider trading investigation by US regulators.
The Securities and Exchange Commission is inquiring about a sale of the electric car company’s shares by Kimbal Musk the day before his brother launched a poll on Twitter in November over whether he should divest a large slice of his own holding in the company, the Wall Street Journal reported on Thursday.
Tesla’s share price fell 5 per cent on the first trading day after the poll, which was backed by an overwhelming majority of participants.
Responding to an inquiry from the Financial Times, Musk said in an email: “Kimbal had no idea I was going to do a Twitter poll.”
He also claimed Tesla’s lawyers were “aware” he was going to conduct the poll. The characteristically unconventional move raised questions over whether Musk had notified the company’s lawyers, as he was required to do by an earlier settlement with the SEC.
The report of an investigation came days after Musk’s lawyers accused the SEC of mounting a harassment campaign against him.
“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 said.
In an apparent reference to the vendetta he has accused the SEC of, Musk added that the investigation was “simply more evidence of Stevie grinding his very tiny axe yet again”.
An SEC letter to the court dated February 18 denying any harassment was signed by Steven Buchholz, a regional enforcement director for the regulator. The SEC declined to comment.
Kimbal Musk sold 88,500 Tesla shares worth about $108mn the day before the Twitter poll was announced. He could not immediately be reached for comment.
Additional reporting by Stefania Palma in Washington
