SEC Sues Elon Musk Over Tweets About Taking Tesla Company Private
NEW YORK (CBSNewYork) - The Securities and Exchange Commission is going after the unconventional top executive of some of the most cutting edge brands in technology after he talked about taking one of his publicly traded companies private.
The SEC alleges "a series of false and misleading statements made by Elon Musk, the Chief Executive Officer of Tesla, Inc., on Aug. 7, 2018, regarding taking Tesla, a publicly traded company, private."
The complaint filed Thursday claimed Musk claimed in an Aug. 7 statement on Twitter that funding was secured to take the company private at $420 per share.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Regulators allege Musk's statements, disseminated via Twitter, "falsely indicated that, should he so choose, it was virtually certain that he could take Tesla private at a purchase price that reflected a substantial premium over Tesla stock's then-current share price.That funding for this multi-billion dollar transaction had been secured, and that the only contingency was a shareholder vote." In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source."
The charge against Musk is the latest blow in confidence to the company leader.
Earlier this month, David Morton, chief accounting officer at Tesla, called it quits after just a month on the job. The controversy is over Elon Musk taking a hit off an apparent marijuana-tobacco joint during a podcast interview that made its rounds on YouTube. And the stock dropped more than 6 percent Friday to close at $263.24 a share — its lowest point since April.