Do you remember the famous tweet from Elon Musk that cost him dearly, including his chair position at Tesla? Elon Musk is once again in the news, and this time again for one of his tweets.
According to WSJ, Security and Exchange Commissions (SEC), the regulatory body for securities markets, is investigating Elon Musk and his brother for alleged fraud that is related to insider trading.
It is believed that the investigation by SEC is focused on one particular tweet that Musk tweeted in the month of November 2021. In that tweet, Musk asked his followers whether it was appropriate to sell Tesla shares.
Just a day before Musk’s tweet which has now attracted the eyeballs of SEC, his younger brother Kimbal Musk had sold over 88,500 Tesla shares worth a whopping $108 million.
A majority of Musk’s followers voted in favor of selling his Tesla shares, and he took the advice as well. The very next day, Tesla’s stock plummeted following the tweet.
Besides being Musk’s brother, Kimbal Musk also enjoys a seat on Tesla’s board of directors. Most often, Kimbal Musk follows a predetermined plan to sell Tesla’s holding and to protect himself from any kind of allegations related to insider trading. However, contrasting his habit, Kimbal’s made a big trade on that day before Elon put out that tweet, as per the SEC.
This isn’t the only time when Elon Musk and federal regulators have stood toe to toe, caused by the CEO’s bizarre tweets.
In August of 2018, Musk revealed that he was exploring options to change Tesla into a privately-owned company. He also revealed that had enough cash to execute his thoughts if he decided to do so.
Since such a decision would benefit shareholders, Tesla’s stock jumped up quickly.
The SEC examined the incident and labeled Musk’s tweet as fraud. The matter, however, was resolved within a short time, resulting in Musk coughing up a whopping $20 million in fine. Besides, SEC also slapped a fine of another $20 million on Tesla. The impact of such action by SEC was grave enough, resulting in Musk agreeing to temporarily quit his role as Tesla chairman.
The fine hardly made any dent in Musk’s personal wealth. The estimated net worth of Musk is $225 billion, therefore the fine of $20 million on Musk is equal to $10.82 for an average person.
Soon after the settlement then, Musk mocked SEC with another tweet.
Even after three years of that incident, Elon didn’t spare any chance to criticize SEC. In July 2020, he once again took a dig at SEC with another tweet.
However, unlike his usual habit, Musk is silent this time. Until the time of reporting the latest SEC investigation, Musk had not tweeted anything in regards to the most recent investigation. However, in the last week Musk criticized the regulator’s “unrelenting probe” of him as well as Tesla.
Musk, who enjoys the stock market dancing on his tweets, apparently, keeps tweeting many controversial statements that could have a severe impact either on himself or his holding companies. In early 2019, a series of his tweets was almost brought him at loggerhead with SEC.