Elon Musk sued for fraud, might be ousted from TeslaLast updated on Sep 28, 2018, 10:53 am
Tesla CEO Elon Musk has been sued for fraud by US federal regulators, the Securities and Exchange Commission (SEC), over his Tesla privatization tweet.
The lawsuit seeks to bar Musk from serving an executive or director of publicly traded companies like Tesla.
Musk had earlier tweeted that he planned to take Tesla private, and had "funding secured" for the move.
Here are the details.
The tweet that became a thorn at Musk's side
Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk) August 7, 2018
Details about the lawsuit
Musk's tweet about taking Tesla private, along with the claim that funding had been secured, had sent social media ablaze and saw Tesla shares soar.
In its lawsuit, SEC said that Elon Musk "knew or was reckless in not knowing" that his tweeted statements were false and misleading.
SEC also alleged that Musk didn't even have the key deal terms thought out.
Elon Musk denies any wrongdoing, calls lawsuit "unjustified"
Meanwhile, in a statement issued by Tesla, Elon Musk said that he was "deeply saddened and disappointed" at the "unjustified action by the SEC".
Musk added that he had always taken action in the "best interests of truth, transparency, and investors".
Additionally, according to NYT, the SEC had approached Musk for an out-of-court settlement, but Musk refused, adamant that he hadn't done anything wrong.
Tesla hasn't been going through a great time
The lawsuit is the latest among Tesla's worries.
The company has, for a while, been trying to meet ambitious production targets publicly declared by Elon Musk (often on Twitter, which seems to be an outlet for the mercurial entrepreneur).
Regulators are also investigating these production goals to determine if they were misleading for Tesla investors.
Musk's woes might not be over yet.