A series of tweets prompt the SEC to sue Elon Musk over ‘false and misleading’ statements.
Elon Musk and Tesla are being sued by the US Securities and Exchange Commission (SEC) for fraud over the company’s aborted plans to take the electric car company private, accusing him of securities fraud for making a series of “false and misleading” tweets about potentially taking the electric car company private.
On August 7 this year, Musk, who both serves as Tesla’s CEO and chairman, tweeted that he was thinking about taking the electric car manufacturer private at a price of $420 per share which was a 20% premium, on existing share prices.
Unsurprisingly, the seemingly random announcement sent shares in Tesla up 7%.
Musk is now being sued by the SEC
According the SEC, this statement was a blatant falsehood. “This statement was false and misleading. Over the next three hours, Musk made a series of additional materially false and misleading statements via Twitter… Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source.”
The lawsuit is seeking significant penalties against Musk, including barring him from serving as an officer or director of a public company, which would in real terms forcibly remove Musk from the board of Tesla.
For his part, and perhaps unsurprisingly, Musk disagrees, and has called the charges baseless, without merit, and intends to defend himself.
“This unjustified action by the SEC leaves me deeply saddened and disappointed,” Musk said 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.”
The SEC suit is just the latest in a series of scandals that Elon Musk has found himself in hot water over.
Just last week, Filehippo reported on the fact that a diver involved in the recent Thai Cave rescue dive was suing Musk for defamation, after Musk delivered a salvo of tweets accusing him of being a ‘pedo.’