Elon Musk sued by SEC

Elon Musk sued by SEC

Elon Musk sued by SEC

The Securities and Exchange Commission says in the complaint filed Thursday that Musk falsely claimed in an August 7 statement on Twitter that funding was secured to take the company private at $420 per share.

The commission alleges Musk had not discussed specific deal terms with any potential financing partners, and he knew that a transaction would be uncertain and subject to numerous contingencies.

Tesla's share price closed up almost 11 percent that day as a result of Musk's tweet. Both the SEC and Tesla have not yet responded to requests for comment.

The SEC said Musk's statements on Twitter were "false and misleading" and that he had never discussed the plans with company officials or potential funders.

The complaint lodged by the SEC in the US District Court in NY alleges that Musk's tweets about taking the company private "were false and misleading because they lacked any basis in fact".

Essentially, the government believes Musk lied-both directly and by omission, in some cases-about the nature of his funding discussions and the way any potential privatization would unfold.

Tesla's investor relations department had not been briefed on the announcement and so took Musk's tweets at face value.

Musk has long used Twitter to criticize short-sellers betting against his company, and several investor lawsuits have been filed against him and Tesla over the tweets.

They claim: "Musk stated that he rounded up the price to $420 because he had recently learned about the number's significance in marijuana culture and thought his girlfriend would find it amusing". 'I have always taken action in the best interests of truth, transparency and investors.

Complicating things further, Musk is also facing a separate lawsuit from British cave diving expert Vernon Unsworth, who he has publicly and repeatedly accused of being a "child rapist" and a "paedo", without providing any proof.

The SEC reaffirmed its commitment to holding individuals to account, adding: "Neither celebrity status nor reputation as a technological innovator provide exemption".

That's according to a report in The Wall Street Journal, which said the SEC was on the brink of filing the settlement, only for Musk to blow it up at the last minute.

The legal document points toward the initial "Funding secured" tweet, followed by additional ones published over the next few hours, including ones regarding investor support.

What's next? Bloomberg reported that SEC lawsuits often seek to bar a defendant from leadership roles. The tweet in question shown below, caused Tesla's shares to rise that day.

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