Elon Musk faces SEC complaint
September 27, 2018
DETROIT — U.S. securities regulators have filed a complaint against Tesla CEO Elon Musk alleging that he made false and misleading statements about plans to take the company private in August.
The Securities and Exchange Commission says in the complaint filed Thursday that Musk falsely claimed in an Aug. 7 statement on Twitter that funding was secured to take the company private at $420 per share.
The complaint filed in the U.S. District Court in Manhattan says that Musk had not discussed or confirmed key deal terms including price with any funding source.
The commission is asking the court for an order that would stop Musk from being "an officer or director" of any public company. The SEC also seeks an order enjoining Musk from making false and misleading statements along with repayment of any gains as well as civil penalties.
A message was left Thursday seeking comment from Tesla.
"Musk made his false and misleading public statements about taking Tesla private using his mobile phone in the middle of the active trading day," the SEC said in the complaint. "He did not discuss the content of the statements with anyone else prior to publishing them to his over 22 million Twitter followers and anyone else with access to the Internet."
Recommended Stories For You
The statements, the complaint said "were premised on a long series of baseless assumptions and were contrary to facts that Musk knew."
Shares of Tesla fell 11 percent in after-hours trading to $273.56, after falling 2 percent before the market closed Thursday.