Late last year, after a wave of news reports pointing to sagging demand for his company’s vehicles, Tesla Inc. Chief Executive Elon Musk sold almost $3.6 billion of his shares in the electric-car maker.
On Jan. 2, Tesla announced fourth-quarter vehicle deliveries that were significantly below the company’s most recent forecast to investors. The news sent Tesla’s stock price plunging when markets opened the next day.
The timing of the stock sales raises a crucial question: Did Mr. Musk know that business had slowed when he sold his shares? Tesla hadn’t updated investors on its outlook in nearly two months.
“This should be of great interest to the SEC,” says James Cox, a securities-law professor at Duke University who has testified before Congress about insider trading. “The issue here is, what did he know and what was the market anticipating when he sold? That’s a critical moment.”
‘Enforcement 40’ for 2020
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