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WASHINGTON— The Securities and Exchange Commission is investigating whether recent stock sales by Tesla Inc.
TSLA,
Chief Executive Elon Musk and his brother violated insider trading rules, according to people familiar with the matter.
The SEC’s investigation began last year after Mr. Musk’s brother sold shares of Tesla valued at $108 million, one day before Mr. Musk polled Twitter users asking whether he should unload 10% of his stake in Tesla and pledging to abide by the vote’s results. Mr. Musk framed the potential sale as a way to cover any taxes he would need to pay if lawmakers imposed new taxes on unrealized capital gains. Mr. Musk began selling billions of dollars worth of stock a few days after his tweet.
His brother, Kimbal Musk, sold 88,500 shares one day before Mr. Musk tweeted about the potential sales of his own. Tesla shares fell sharply in the wake of Mr. Musk’s poll—58% of voters said he should sell—indicating the tweet was viewed as negative news.
Spokesmen for the SEC and Tesla didn’t immediately respond to a request for comment.
Tesla has recently accused the SEC of harassing the company and Mr. Musk by repeatedly launching new enforcement investigations. The friction dates to a 2018 lawsuit in which regulators accused Mr. Musk of misleading investors with a tweet that said he could take the company private and had the funding to do so.
An expanded version of this story appears on WSJ.com.
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