April 30 U.S. federal prosecutors have sent subpoenas to Tesla Motors Inc and Cardiovascular Systems Inc asking for documents and emails relating to a trading plan that allows executives to sell company stock, the Wall Street Journal said on Tuesday, citing a person familiar with the probe.
The Securities and Exchange Commission (SEC) allows company executives to trade their own stock by using a preset plan known as "10b5-1," even when they have access to private information.
The U.S. attorney's office for the Eastern District of New York issued subpoenas requesting information from companies and funds cited in an April 25 article in the Wall Street Journal that highlighted trading at three companies by directors who also run funds. ()
A spokesman for Cardiovascular Systems told the Journal that the medical device company was readily providing the information requested. "We have nothing to hide," he said, adding that the director's investment fund that sold shares had a 10b5-1 plan that was "in compliance with the company's governance procedures."
A spokeswoman for electric car company Tesla declined to comment to the Journal. A third company cited in the previous Journal article, Double-Take Software, has since been acquired by Vision Solutions, a private company. ()
Tesla, Cardiovascular Systems and Vision Solutions could not immediately be reached for comment by Reuters outside of regular U.S. business hours.