SEC Sues Elon Musk Over Post Saying He Was Going to Take Tesla Private

The Tesla CEO is accused of securities fraud, after tweeting "false and misleading statements" about taking the electric car company private.

A tweet storm has caused major trouble for Elon Musk.

Back in August, the business magnate went to Twitter to announce he had secured funding to take Tesla private at $420 a share. The car company’s stocks rose more than 10 percent following Elon’s post, as many people questioned the legality of the tweet.

Nearly two weeks later, the Tesla CEO returned to the platform stating he had decided to keep the company public; however, the Securities and Exchange Commission is claiming the “funding secured” announcement was not only fabricated, it was illegal.

According to CNBC, the SEC filed a lawsuit against Musk on Thursday, accusing him of committing securities fraud. The 23-page complaint reads:

Musk made his false and misleading public statements about taking Tesla private using his mobile phone in the middle of the active trading day. 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. He also did not inform Nasdaq that he intended to make this public announcement, as Nasdaq rules required.

The plaintiffs seek to bar Musk from serving as the director or officer of Tesla … and any other public company. Sources close to Tesla claim the company is also expecting to be sued; however, it was not named as a defendant. CNN Moneyreports Tesla shareholders have also filed lawsuits against Musk, alleging he posted the aforementioned tweet in an attempt to manipulate the stock price.

"This unjustified action by the SEC leaves me deeply saddened and disappointed," Musk told CNBC in a statement. "I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way."

Latest in Life