Elon Musk sued by U.S. Securities and Exchange Commission over Tesla privatization tweets

The U.S. Securities and Exchange Commission (SEC) has sued Tesla CEO Elon Musk over the contents of his August 7th, 2018 tweets during which Musk alleged that Tesla was moving towards privatization.

According to Bloomberg, citing a September 27th, 2018 filing in the New York southern district court, Musk has been accused of misleading investors when he claimed that he had “funding secured’ to take Tesla private. The SEC has accused Musk of fabricating the claim in his tweets.

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The SEC court filing states that when Musk published his tweets he “had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source.”

“Musk made his false and misleading public statements about taking Tesla private using his mobile phone in the middle of the active trading day. He did not discuss the content of the statements with anyone else prior to publishing them to his over 22 million Twitter followers and anyone else with access to the Internet,” reads an excerpt from the SEC’s filing.

“He also did not inform Nasdaq that he intended to make this public announcement, as Nasdaq rules required.”

The suit seeks to prevent Musk from serving as an officer or director of a public company.

It’s not clear if this is just for the duration of the suit or forever. Bloomberg reports that this is a common request made during SEC lawsuits.

More to come…

Source: Bloomberg

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