Elon Musk Being Sued For Fraud By Feds Who Want Him Barred From Being Tesla CEO
September 28th, 2018
The Securities and Exchange Commission filed a lawsuit against Tesla CEO Elon Musk for alleged securities fraud, calling his previous tweets about having the “funding secured” to take Tesla private a “series of false and misleading statements.” You can read the entire claim here.
Musk is also facing a criminal probe by the U.S. Department of Justice over his statements, after it became apparent that no deal had been arranged. Tesla abandoned the plan not even three weeks later.
Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk) August 7, 2018
The SEC alleged that Elon Musk chose a $420 price for possibly taking Tesla private because it is a marijuana culture reference that would "amuse" his girlfriend.
Musk said the SEC's allegations are "unjustified" and that he acted in the best interests of investors. In August, Musk tweeted that he was considering taking Tesla private, adding: "Funding secured." That same tweet sent Tesla's stock see-sawing for weeks. Musk later explained that he had been in discussions with the Saudi Arabia's sovereign wealth fund and felt confident the funding would come through at his proposed price of $420 per share.