The author | Zhou Chaochen
The head art | Visual China
The road is narrow, and Musk is once again targeted by the SEC (Securities and Exchange Commission).
On February 24, EST, the Wall Street Journal quoted people familiar with the matter as saying that the SEC was investigating whether Tesla Inc. (TSLA) CEO Elon Musk and his brother Kimbal Musk recently sold shares in violation of insider trading rules.
On November 5, 2021, the day before Musk polled users on Twitter, asking if he should sell his 10% Tesla stake and pledged to abide by the user's vote, Kimbar sold $108 million worth of 88,500 shares of Tesla stock.
Musk said in the comments section of the Tweet that he intends to sell his stake because he will need to do so to pay the taxes he will have to pay once lawmakers impose new taxes on unrealized capital gains: "I'm not going to get cash wages or bonuses from anywhere." I only have stocks, so the only way I personally pay taxes is to sell shares. ”
More than 3.5 million Twitter users took part in the vote, with 58 percent choosing "should." Musk began selling billions of dollars worth of Tesla stock a few days after the tweet and triggered a sharp drop in Tesla stock.
In response to the SEC's latest allegations, Musk argued: "Given that the vote I initiated on Twitter caused me to lose more than $1 billion in selling stocks, the idea that I care about my brother might make millions less when selling stocks is completely ridiculous." ”
Musk then formally accused the SEC, through his lawyers, of leaking information under federal investigation, saying it was retaliation for his public criticism of the SEC.
However, some professionals believe that Musk's explanation is untenable. Wang Yanxing, a senior researcher at the Chongyang Institute of Finance at Chinese Min University, said: "Musk's defense is somewhat far-fetched, that is, the loss when selling stocks, and whether insider trading is established, the logic has little to do with it, the key lies in whether there is evidence of insider trading." ”
At the same time, he believes that Kimbar's sale of shares the day before Musk tweeted that he might sell his shares is an extreme coincidence that is difficult to justify.
According to the data, Musk's younger brother Kimbar has been a member of Tesla's board of directors since 2004. Forbes estimates that he is worth at least $550 million and holds a 0.04 percent stake in Tesla. In addition, he may also have a stake in SpaceX and a board seat at the company. The brothers' special relationship has sparked resentment among some Tesla shareholders, accusing it of complicating his brother's role as an independent director.
The Wall Street Journal reported that on the day of the sale, Kimbal first exercised stock options, bought 25,000 shares of Tesla at $74.17 per share, and then sold a total of 88,500 shares in batches at an average price of about $1,230, the latter worth nearly $108 million, accounting for about 15% of Kimbar's holdings excluding options.
The problem is that Kimball Musk's share sale didn't use the 10b5-1 plan for sale filings — a predetermined trading plan that allows company executives and directors to trade at a predetermined period of time, thus avoiding insider trading allegations — though he has often used the program in the past when trading Tesla stock.
This may have given the SEC a motivation to investigate him and his brother Musk. 10 days after Musk tweeted his vote, he received a subpoena from the SEC. Tesla's K-10 annual report document disclosed earlier this month shows that on November 16, 2021, the SEC issued a subpoena to Tesla asking tesla to provide information about the management process involved in fulfilling the 2018 settlement.
This can also be seen as a sequel to the SEC's 2018 feud with Musk.
On August 7, 2018, Musk wrote on Twitter: "We are considering taking Tesla private at a price of $420 per share. Funds are guaranteed. ”
The SEC immediately disputed the statement and charged him with securities fraud. The SEC allegations that Musk said on Twitter that he was considering taking Tesla private at a price of $420 per share, and the funds had been put in place, which was significantly higher than Tesla's stock price at the time, tesla stock price rose by 11% on the same day, but then the information that came to light showed that the funds were not fully implemented, Musk himself knew that there was still uncertainty in the transaction, and then Musk announced that he would abandon the privatization.
On September 29 of the same year, media reported that Musk reached a settlement with the SEC as part of the settlement, Musk agreed to resign as tesla chairman and pay a fine of $20 million to settle the SEC's allegations of alleged securities fraud on September 27; Tesla will also pay $20 million to settle its allegations of failing to adequately supervise Musk's tweets; Musk will be allowed to remain Tesla's CEO but must resign as chairman within 45 days. Meanwhile, any future Musk tweets are pre-approved by one of Tesla's legal/regulatory compliance officers with any information about public companies that could affect their share prices.
Although it was reconciled, Musk and the SEC also formed a bond. Later that year, in an interview with CBS, Musk said publicly: "I want to be clear. I don't respect the SEC. I don't respect them. ”
On February 25, 2021, Eastern Time, foreign media reported that the SEC may investigate Tesla CEO Musk's tweet about "Dogecoin" (DOGE). That caused Tesla shares to close in the day and fall 8 percent. Musk's response was full of disdain: "I hope they investigate, it's going to be great!" ”
Steven Perkin, co-director of the SEC's Enforcement Division, said: "Business managers' celebrity status or reputation as technology innovators does not grant them permission to take these responsibilities rashly (speak out privately)." ”
Stephanie Awakian, co-director of SEC Enforcement, said: "Caution in providing truthful, accurate information is one of the most important responsibilities of CEOs, and the standard has the same effect when communicating through social media or other non-traditional forms. ”
For the foreseeable future, Musk's feud with the SEC will obviously continue, and Musk has accused the SEC of harassing him through successive investigations and trying to "deprive" him of his right to free speech.
Last year, another thing that is well known was that when Musk became the world's richest man, he ushered in the "forced donation" on Twitter from the United Nations World Food Programme (WFP).
After a few rounds of back-and-forth, on February 15, 2022, the SEC submitted an F5 report showing that between November 19 and 29 last year, Musk donated more than 5 million Tesla shares to charities, amounting to $5.8 billion. This time node happened to be a few days after he was "forced to donate" by the WFP, and there was speculation that Musk might donate the money to the WFP.
But WFP apparently did not receive the donation. On February 15, according to foreign media reports, WFP's David Beasley said that WFP has not received any news from Musk, "Millions of people around the world are on the verge of starvation." WFP's receipt of the money remains to be seen, but I'm excited to hear that Elon is involved, which is an amazing and great first step. ”
This is Musk, using Twitter to tease those he is not used to, but with this personal charm to attract more fans to worship him.
Tesla investor Ross Gerber once said of Musk in an interview with the media: "Over the years, some of Musk's behavior has been shocking and caused huge losses, and his trouble with the US Securities Exchange is like this... It was not easy for him to go all the way. My fear is that success has made him a little debauched again. ”
Musk's mood at the moment is not affected by the latest SEC allegations. On Feb. 27, after Ukrainian officials asked him on Twitter to "provide StarLink ground stations for Ukraine," Musk replied: "The Starlink satellite broadband service is available in Ukraine, and SpaceX is sending more terminals to Ukraine." ”
Musk said in an interview with CBS: "Twitter is a battlefield. If someone is going to jump into the battlefield, it's like, 'Okay, you're in the arena.' Come on! ’”
Trump's Twitter rule, Musk's twitter governance of corporations, are two unique phenomena of this era.