US Lawmakers Ask SEC to Launch Fraud Investigation Into Elon Musk

A letter that members of Congress sent to the SEC claims Musk misled Neuralink investors in a post on X about the fate of monkeys used to test a brain-chip interface.
US Capitol building
Photograph: Sarah Silbiger/Getty Images

Federal regulators are being pushed to investigate whether Elon Musk deceived investors in his brain-chip startup Neuralink by omitting details about the gruesome deaths of at least a dozen animals who were surgically fitted with its implants.

Four members of the US House of Representatives today alleged that Musk issued false statements in September regarding the deaths of 12 macaque monkeys, the subjects of experiments at a primate center in California between 2018 and 2020, according to a letter obtained by WIRED.

The lawmakers have urged Gary Gensler, head of the Securities and Exchange Commission (SEC), to initiate a probe into whether Musk committed securities fraud by glossing over the lethal aspects of Neuralink’s tests—a potential violation, they claim, of an SEC rule designed to shield investors from material omissions and misstatements linked with the purchase or sale of a security.

Musk, in September, claimed in a post on X (formerly Twitter) that no animal test subjects died as "a result of a Neuralink implant,” adding that the company strove early on to “minimize risk to healthy monkeys,” choosing only those who were “close to death already.”

“Mr. Musk knows this statement is false,” the lawmakers told Gensler, a former Goldman Sachs investment banker turned Wall Street sheriff.

The lawmakers’ push to see Musk investigated is spearheaded by US representative Earl Blumenauer from Oregon. As of Wednesday, three additional Democrats had joined the effort, including Barbara Lee, James McGovern, and Tony Cárdenas.

A WIRED investigation this year shed serious doubt on Musk’s animal welfare claims, finding that several macaque monkeys who’d been experimented on suffered greatly before their deaths, anguish that was prolonged in some cases to help Neuralink gather data following its surgeries. Veterinary records obtained by WIRED show many of the fatalities resulted directly from surgical complications linked by employees of the California National Primate Research Center to the implant procedure.

A former employee told WIRED this year that Neuralink's animal test subjects could not have been "close to death,” as Musk had claimed. The animals routinely underwent years of training in advance of the procedure, they said. In one experiment, a piece of a Neuralink device “broke off” during implantation, an autopsy report says, causing a fungal infection. In another, a Neuralink implant left a portion of a monkey’s cerebral cortex “focally tattered.”

“The idea that these were terminal monkeys is ridiculous,” a former Neuralink employee told WIRED. “We had these monkeys for a year or so before any surgery was performed.” (Neuralink did not respond to WIRED's request for comment at the time.)

The lawmakers’ letter to the SEC claims the animals’ deaths are directly related to the safety and marketability of Neuralink’s brain-computer interface. It is critical, they say, that investors in the company be provided with accurate information. The minimum investment accepted by outside parties is $14,995, SEC filings show.

Neither Musk nor Neuralink responded this week to inquiries concerning Musk's claims. A spokesperson for the University of California, Davis, overseer of the primate center where Neuralink’s experiments were conducted, declined to comment.

Reportedly valued at around $5 billion, Neuralink raised more than $280 million, according to filings, during a recent funding round this year. “Given the scale of these investments and Mr. Musk’s history of misleading investors,” the lawmakers write, “it is crucial that the SEC investigate whether Mr. Musk’s September 10, 2023 post violated [Rule 10b-5].”

The rule, which authorizes the SEC to regulate securities fraud, was affirmed by the Supreme Court as recently as 2014 in a case against Halliburton, one of the nation's largest oil service companies. It relies on a theory known as "fraud on the market," stipulating a causal link between a company’s value and the integrity of public information regarding its activities.

Blumenauer, who cochairs the Congressional Animal Protection Caucus, characterized the brain-computer startup as having a “distressing history of alleged animal welfare abuses,” saying the SEC investigation should determine whether Musk intentionally misled the public by “misrepresenting the harm caused by botched animal trials.”

“When dealing with alleged animal welfare violations as egregious as those leveled against Musk, there needs to be greater urgency to hold him accountable,” he told WIRED in a statement.

Musk has previously faced investigations for allegedly misleading investors. In 2018, the SEC charged him with securities fraud over a series of false tweets regarding a potential push to take Tesla private. In a settlement, Musk was forced to step aside as chairman for three years and personally pay a $20 million fine, with Tesla fined an additional $20 million. As a condition of the settlement, Musk neither admitted nor denied the allegations.

In an unrelated case, the SEC urged a federal judge last week to compel Musk to testify as part of a probe into his $44 billion takeover of Twitter.

In May, the US Food and Drug Administration issued approval for Neuralink to begin human trials, having previously rejected the company’s application over safety concerns. Reuters reported that those concerns centered largely around whether the electrodes connected to the Neuralink device were prone to detaching and moving freely around after being connected to a subject’s brain.

In a report this month, Bloomberg News claimed that thousands of people have expressed interest in obtaining an implant from Neuralink, a device that Musk once famously described as a “Fitbit in your skull.” The procedure will involve removing a coin-sized piece of the subject’s cranium and allowing a proprietary robot to weave superthin wires into their brain.

Read the full letter below:

The Honorable Gary Gensler
U.S. Securities and Exchange Commission
100 F St. NE
Washington, DC 20549

Dear Chair Gensler:

Thank you for your ongoing work to protect investors and safeguard the integrity of our financial system. We write to request that the Securities and Exchange Commission (SEC) investigate whether Elon Musk, Chief Executive Officer of the medical device company Neuralink (Central Index Key # 0001708503), committed securities fraud by making intentionally misleading statements to investors.

Since 2016, Neuralink has conducted experiments on animals with the intention of developing an implantable brain-computer interface. Between May 2017 and December 2020, employees performed invasive, exploratory brain studies on rhesus macaques at the University of California, Davis (UC Davis). During most of the experiments, Neuralink employees drilled two dime-sized holes in the animals’ heads, implanted electrodes in their brains, and attached titanium plates to their skulls using bone screws.

In 2021, as a result of a California Public Records Act lawsuit against UC Davis, the Physicians Committee for Responsible Medicine obtained veterinary records from Neuralink’s experiments that show that the implantation of the Neuralink device caused debilitating health effects in the monkeys. Test monkeys suffered from chronic infections, swelling in the brain, “remnant electrode threads” from the device, a “tattered” cerebral cortex, paralysis, seizures, loss of coordination and balance, and depression. Public records reveal that at least 12 young, previously healthy monkeys were euthanized by Neuralink as a direct result of problems with the company’s implant.

On September 10, 2023, Mr. Musk responded to animal welfare concerns at Neuralink via a post on the social media platform X, which he also owns. He wrote:

“No monkey has died as a result of a Neuralink implant. First our early implants, to minimize risk to healthy monkeys, we chose terminal mon[k]eys (close to death already)[.]”

Yet Mr. Musk knows this statement is false. Monkey health records show that, while several animals had suffered physical trauma and been used previously in experiments at UC Davis, there is no evidence that they were “close to death,” as Mr. Musk stated. Rhesus macaques often live to about 25 years in captivity, with some living to 40. But the average age of the 12 monkeys euthanized by Neuralink was 7.25 years when they were moved to the company’s experimental protocol.

The animals’ deaths and the reasons for their deaths relate directly to the safety and marketability of Neuralink’s brain-computer interface. It is critical that the company provide investors with factually accurate information, and thus we are concerned that Mr. Musk may have violated SEC Rule § 240.10b-5:

It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange...[t]o make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not connection with the purchase or sale of any security.

In its 2018 complaint against Mr. Musk for posting misleading messages on the platform then known as Twitter, the SEC referenced his 22 million followers, emphasizing the reach of his social media account: “His tweets were published instantaneously to those people and were also publicly available to anyone with Internet access.”

Mr. Musk’s online reach has grown significantly since 2018. Today, he has 162.9 million followers on X, the most of any account on the platform, and his September 10 post has already received more than 788,000 views.

The company claims to have raised $280,274,981 in investments, with a minimum investment accepted from any outside investor of $14,995, according to its August 2023 Form D notice. Given the scale of these investments and Mr. Musk’s history of misleading investors, it is crucial that the SEC investigate whether Mr. Musk’s September 10, 2023 post violated SEC Rule § 240.10b-5.

Thank you for considering this request.