The SEC’s complaint seeks to bar Musk from serving as an officer or director of a public company.
The Securities and Exchange Commission (SEC) on Thursday charged Tesla CEO Elon Musk with securities fraud over « a series of false and misleading tweets » about potentially taking Tesla private. In its complaint, the SEC seeks to bar Musk from serving as an officer or director of a public company.
Tesla shares were down more than 10 percent in after-hours trading.
The charges stem from Musk’s Aug. 7 tweets, in which he claimed he could take Tesla private at $420 per share — giving the electric car company a valuation much higher than its market cap. Musk also tweeted that funding was « secured, » raising questions about who would provide the funding and whether such information was being properly disclosed.
In a release, the SEC said, that « in truth, Musk had not discussed specific deal terms with any potential financing partners, and he allegedly knew that the potential transaction was uncertain and subject to numerous contingencies. » The tweets, Thursday’s complaint says, amount to a violation of antifraud provisions of the federal securities laws.
« Corporate officers hold positions of trust in our markets and have important responsibilities to shareholders, » Steven Peikin, co-director of the SEC’s enforcement division, said in a statement. « An officer’s celebrity status or reputation as a technological innovator does not give license to take those responsibilities lightly. »
