SEC suit accuses Elon Musk of misleading investors, deepening his legal woes

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BP_Elon

Musk, 47, is one of the highest-profile tech executives to be accused of fraud by the Securities and Exchange Commission.

The regulator says Mr Musk had made no such plans.

They led to confusion in the stock market and harmed investors, according to the complaint. It is also seeking monetary fines and penalties.

The suit claims that when Musk tweeted he had "funding secured" to take Tesla private, he had not discussed any specific terms with potential sources of funding.

The SEC filing said funding was not secured because Musk had never discussed it with any potential financial sources, he had never investigated whether the "special objective fund" could be created, and he hadn't received "confirmed" support for the proposed transaction.

The Securities and Exchange Commission has opened a case against Tesla and SpaceX CEO Elon Musk.

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At approximately 1:23 PM EDT, about 35 minutes after Musk's initial tweet about taking Tesla private, Tesla's Chief Financial Officer sent a text message to Musk, "Elon, am sure you have thought about a broader communication on your rationale and structure to employees and potential investors". The SEC did not immediately respond to a request for comment late on Thursday. Integrity is the most important value in my life and the facts will show I never compromised this in any way'. Including the after-hours plunge, Tesla's stock has plummeted more than 29% since Musk's infamous tweet. The fund reps again bring up a potential Tesla production facility in the Middle East; Musk interprets this to mean that the Saudi funding might be "a precondition to the fund's willingness to take Tesla private", depending on the amount of money required.

Yes, you heard that right: The SEC is requesting that Musk be barred from serving as an officer or director of any publicly traded company.

In other words, if the SEC can make these charges stick with a conviction, Elon Musk would no longer be able to be the CEO of a public company, at least in the United States. After 18 days of blog posts from Tesla's board and reported subpoenas, Musk backtracked, saying the electric-car company will remain public for the time being.

Since the report of the complaint, shares of the automaker fell roughly ten percent in stock trading.

"Am considering taking Tesla private at $420", Musk said. Shares have tumbled since the August 7 tweet as the media reported that the SEC was investigating the situation and as Tesla said the Department of Justice made a voluntary request for documents surrounding the potential go-private transaction.

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