Elon Musk accused of securities fraud by US SEC

[Arthur]

Sources: Securities and Exchange Commission [PDF] (via BBC News)

 

The Securities and Exchange Commission has filed a lawsuit accusing Tesla boss Elon Musk of securities fraud.

 

The US financial regulator says Mr Musk's claims that he had secured funding to take the electric carmaker private were "false and misleading".

 

It is seeking to bar Mr Musk from acting as an officer or director of a publicly traded company.

 

Mr Musk called the action "unjustified" saying he acted 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," he said in a statement.

 

Mr Musk startled the business world last month when he took to Twitter to announce that he was considering a plan that would de-list the company from the stock exchange.

 

He wrote he had "funding secured" for the proposal, which would value Tesla at $420 per share.

 

The statements "created the misleading impression that taking Tesla private was subject only to Mr Musk choosing to do so and a shareholder vote", according to the SEC complaint, which was filed on Thursday in federal court in New York.

 

"In truth and in fact Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source," it said.

 

The 7 August tweets took even people within the company by surprise.

 

https://twitter.com/elonmusk/status/1026872652290379776

 

[Arthur]

 

Elon Musk and Tesla to pay $40m to settle SEC case over tweets

 

The Securities and Exchange Commission said on Saturday it had reached a $40m settlement with the automaker Tesla and its chief executive, Elon Musk, over his 7 August tweets about taking the company private.

 

Tesla and Musk will each pay $20m to settle the case and Musk will step down as chairman but will remain as chief executive.

 

Tesla’s share price has suffered recently given controversy around Musk. In the 7 August tweets at issue in the SEC case, he wrote: “Am considering taking Tesla private at $420. Funding secured.”

 

That statement was “false and misleading”, the SEC alleged, and was the first of a series of “materially false and misleading statements” that duped investors.

 

The SEC announced the settlement just two days after filing the case, which sought to oust Musk as CEO. That has not happened. The settlement only requires Musk to relinquish his role as chairman for at least three years.