The Securities and Exchange Commission has filed a lawsuit against Tesla CEO Elon Musk for committing alleged fraud over controversial tweets he posted in August. The announcement has led to a massive slip in Tesla stock, with shares down over 5 percent during after-hours trading. The SEC wants to bar Musk from being able to hold any chief executive positions for any public company for “knowingly misleading the public.”
The tweets in question arose when Musk discussed the possibility of taking Tesla private. He proposed that, with $420 a share, he had a “funding secured” that would allow for this transition to occur. According to the SEC, Musk was willingly aware that no such deal was possible. Additionally, he had not contacted any other Tesla executives, and he was issuing “false and misleading statements.”
Musk retaliated, calling the accusations and lawsuit “unjustified action,” thus spurring further investigation into his August 7th tweet. He also claimed to BusinessInsider he was “deeply saddened and disappointed.” As the situation continued to blow up, stocks fell an additional 5 percent, causing Tesla to tumble over 10 percent per share as of today, Friday, September 28th.
