SEC Announces Securities Fraud Charges Against Elon Musk

(CN) – The Securities and Exchange Commission is charging Tesla founder Elon Musk with securities fraud over a “series of false and misleading tweets about a potential transaction to take Tesla private. ”

The commission claims Musk’s tweets on August 7 falsely stated that a plan to take Tesla private was all but a done-deal, with only a shareholder vote standing in the way. The $420 share price Musk touted was a “substantial premium” over the company’s share price at the time.

“[I]n 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 commission says. “Musk’s tweets caused Tesla’s stock price to jump by over six percent on August 7, and led to significant market disruption.”

The SEC seeks “a permanent injunction, disgorgement, civil penalties, and a bar prohibiting Musk from serving as an officer or director of a public company.”

 

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