Are you a lucky guy or are you a genius stock-tipper?

It’s the reason for the reportedSEC investigates insider trading in the case of Kimbal Musk’s purchase TeslaBefore Elon Musk’s stock-sale plans were made public, shares existed before he. The Wall Street JournalThe SEC began its investigation into Kimbal Musk’s $108 million stock sale. This was just a day after Elon Musk surveyed Twitter users to see if 10% of their entire stake had been sold. Tesla shares fell 30% after Elon Musk’s announcement on Twitter and the eventual sale of his share.

Kimbal serves as Elon’s brother and is also on Tesla’s board of directors. According to insider-trading regulations, board members and employees of the company are prohibited from trading with material non-public information.

The attorneys for Elon Musk and Kimbal Musk did not respond to our request.

However, insider traders attorneys say that the Musk brothers case could prove difficult.

First, Elon Musk may not be able to share his personal plans with the stock market. Musk’s plan to sell stock may be treated as personal information, not company material.

“Judgments around insider-trading are now less about manipulating the market or being unfair, but about misusing information that belongs to an employer,” said Howard A. Fischer, a partner at Moses & Singer in New York.

Musk spoke to the Financial TimesHe stated in an email that Tesla’s lawyers had been “aware” of his Twitter poll. However, he stated that “Kimbal did not know” that he was planning to conduct a Twitter survey.

Any insider-trading allegations and charges will face a greater hurdle if there is proof of communication. It could prove difficult to bring insider trading charges against Elon Musk if Kimbal Musk overheard him talking about stock sales or inferring that Elon would sell.

Lawyers claim that the SEC may attempt to locate all communications between Elon Musk (and Kimbal) in the few days and weeks before the sale. This could be their email addresses, corporate and personal, and any chats or texts they send. Also, records from any communications with the board.

Without witnesses and if the stock sale was discussed orally, it could prove to be very difficult for them to prove that they were insiders. Fischer stated that the amount of evidence they have will determine what their chances are.

He may have sold the stock right before an important market event, but it could just be coincidence. Perhaps they were having a BBQ with their families — the Musks may have family barbecues — when Kimbal guessed that Elon was going to do something, but not have any specific conversations about the stock.

This timeline shows the sale of Kimbal and Elon in 2021.

• September 14th: Elon Musk launches a 10b51 program to sell Tesla stock. It was not disclosed publicly at the time.
• Nov. 5 : Kimbal Musk sells 88,500 shares of Tesla — about 15% of his total holdings — for an average price of $1,229 a share. The total amount of his proceeds is $108.8 million.
• Nov. 6th: Elon Musk Tweets to His Followers: “Much lately is made of unrealized gain being a method of tax avoidance. I propose selling 10% Tesla stock. Are you in favor of this? Musk pledges to adhere to the results. 58% voted in favour. Tesla shares start to decline.
• Nov. 10, Elon Musk makes a sale over $4 billionTesla stock. This triggered almost two months’ worth of stock-sales. The SEC filing revealed that the sales were part in September’s scheduled-selling plan.
• December 28th: Elon Musk sells $16 billion worth of stock.

Tesla’s share price is now at around $812 a share — about 34% below the price at which Kimbal Musk sold his shares.