Did Elon Musk Mislead Investors About Safety of Neuralink's Brain Implant? US Lawmakers Demand Probe

Four US lawmakers have written to the Securities and Exchange Commission requesting an investigation into Elon Musk’s comments on Neuralink and whether he committed securities fraud by allegedly misleading investors.

The four Democratic House Reps. Earl Blumenauer of Oregon, Jim McGovern of Massachusetts, and Barbara Lee and Tony Cardenas of California urged Gary Gensler, head of the Securities and Exchange Commission (SEC) to investigate whether Musk, the Neuralink co-founder committed securities fraud by allegedly misleading investors about the safety of a brain implant being developed by the billionaire’s firm Neuralink, as per the letter reviewed by Reuters.

The letter wants the regulator to probe whether Musk omitted details about the deaths of at least a dozen animals who were the test subjects of the firm’s implants.

The scrutiny from lawmakers comes as Neuralink is preparing to test the brain implant in humans for the first time. The company was cleared by the U.S. Food and Drug Administration for its first-in-human clinical trial, a critical milestone for the start-up's ambitions.

Musk's Claim

In a post on X (formerly Twitter), Musk claimed that no animal test subjects died as "a result of a Neuralink implant.” He further claimed that to minimize the risk to healthy monkeys, the company chose only the monkeys who were “close to death already.”

The letter alleges that the Musk issued false statements regarding the deaths of 12 macaque monkeys, who were the test subjects of the experiments. It also alleged that Musk’s statement deliberately downplayed investor concerns about the results of its animal testing.

What do the lawmakers want?

The lawmakers want the regulators to find out if Musk misinformed investors about the lethal implications of Neuralink tests. As per the letter, this was also claimed to be a potential violation of an SEC Rule 10b-5, the WIRED reported. The rule is designed to shield investors from material omissions and misstatements related to the purchase or sale of a security.

The letter further cites veterinary records obtained from Neuralink experiments in monkeys, which revealed that the animals suffered "debilitating health effects" from the implants. It said that at least 12 young and healthy monkeys were euthanized due to problems with the implant.

Concerns with Neuralink's animal testing

The lawmakers wrote to the SEC that evidence reviewed questions the safety and marketability of Neuralink's brain-computer interface. An investigation conducted by WIRED, found that several macaque monkeys suffered greatly before their deaths in the experiments and that many fatalities resulted directly from surgical complications from the implant procedure.

An employee also told the publication that the animals could not have been close to death as they routinely underwent years of training.

Last year, Reuters also cited employees who told the publication that the company was rushing and botching surgeries on animals causing more deaths than necessary. The report found that the push for speed came from Musk, to obtain the safety data required by the FDA to authorize human testing.

Valued at around $5 billion, Neuralink raised over $280 million this year, according to filings during a recent funding round this year. The lawmakers stated that given the scale of investments and Musk’s history of misleading investors (referring to a 2018 investigation), the SEC must investigate his statement in the light of Rule 10b-5.