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The Securities Commission accused Elon Musk of fraud due to a tweet about turning Tesla into a private company

If the court satisfies the claim – Musk may lose the ability to manage the company.

The US Securities and Exchange Commission filed a lawsuit against Elon Musk, accusing him of fraud. This was reported by CNBC with reference to documentssubmitted to the Manhattan District Court.

During the press conference on the Musk case, the SEC sought to remove him from Tesla’s management and prevent him from holding executive positions or being on the board of directors of any public companies.

Representatives of the agency noted that the general director and the chairman of the board of directors of a public company have responsibilities to shareholders. One of them is to be cautious in statements for investors, regardless of the form in which these statements are made.

The status of a celebrity and the reputation of a technological innovator do not exempt from compliance with federal securities laws.

representatives of SEC for the press conference

In its lawsuit, the SEC has called the Tweets Musk about plans to turn the company into a private one “deceitful and misleading”. The department noted that the businessman actually knew that he did not have the financing to buy out the company. In addition, Musk did not notify regulators properly, including the NASDAQ exchange, which requires warning of such announcements in advance.

In a conversation with CNBC, Musk declared that he was “deeply upset” because of “unreasonable charges”.

I always did everything in the best interests of truth, transparency and investors. Honesty is one of the most important meanings in my life and facts will show that I have not compromised it in any way.

Elon Musk

Against the backdrop of the claim, Tesla shares fell more than 10% after the close of the exchange – from $ 307 to $ 271 apiece. Sources of journalists in Tesla said that the company is also awaiting a lawsuit from the SEC. In the current statement, Tesla is not mentioned as the responding party.

The reason for the investigation of the SEC was a tweet , which Musk wrote on August 7. In it, he reported that he was thinking about buying out Tesla and turning it into a private company. Musk noted that the financing was “secured”, although in reality a possible deal with the sovereign fund of Saudi Arabia was far from over.

The entrepreneur made an announcement at the height of the trading day at the stock exchange, although such announcements are usually held after the auction. Musk did not warn anyone in advance, so the company’s shares soared by 7% in a few minutes and the NASDAQ exchange had to stop bidding to protect investors.

After that , Tesla shareholders sued Musk , and the businessman changed his mind about turning the company into a private one. He explained that his shareholders had reassured him.

In the beginning of September, three top managers left Tesla for a week . The media associated this with “unstable behavior” Musk.

September 18, Bloomberg reported that the US Justice Department started a criminal case on Tesla because of the tweet Musk. The sources of the publication said that the investigation is at a very early stage and can lead to nothing.

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