SEC Sues Elon Musk for Making ‘False and Misleading’ Statements to Investors

CHICAGO, IL – JUNE 14: Engineer and tech entrepreneur Elon Musk of The Boring Company listens as Chicago Mayor Rahm Emanuel talks about constructing a high speed transit tunnel at Block 37 during a news conference on June 14, 2018 in Chicago, Illinois. Musk said he could create a 16-passenger vehicle to operate on a high-speed rail system that could get travelers to and from downtown Chicago and O’hare International Airport under twenty minutes, at speeds of over 100 miles per hour. (Photo by Joshua Lott/Getty Images)

Elon Musk has tweeted himself into serious trouble.

The Securities and Exchange Commission sued Tesla’s CEO on Thursday for making “false and misleading” statements to investors. It’s asking a federal judge to prevent Musk from serving as an officer or a director of a public company, among other penalties.

The complaint hinges on a tweet Musk sent on August 7 about taking Tesla private.

“Am considering taking Tesla private at $420,” Musk said. “Funding secured.”

The SEC said he had not actually secured the funding.

“In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source,” the SEC said in its complaint.

That tweet, and subsequent tweets from Musk over the next three hours, caused “significant confusion and disruption in the market for Tesla’s stock,” as well as harm to investors, the SEC said. On the day of Musk’s tweet, Tesla’s stock shot up nearly 9%. It has declined substantially since then.

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SOURCE: CNN, Julia Horowitz