In the tweets, Musk claimed that funding had been secured to take Tesla private at $420 per share – 20% higher than Tesla shares were trading at the time.
The SEC accuses Musk of not having discussed deal terms with any funding partners, where Musk alleged that the only step remaining in the process was putting the move to a shareholder vote.
"He allegedly knew that the potential transaction was uncertain and subject to numerous contingencies," stated the SEC’s complaint. "Musk’s tweets caused Tesla’s stock price to jump by more than 6% on 7 August and led to significant market disruption.”
Musk later went back on the decision to delist the electric car maker, saying: “Given the feedback I’ve received, it’s apparent that most of Tesla’s existing shareholders believe we're better off as a public company.
"Additionally, a number of institutional shareholders have explained that they have internal compliance issues that limit how much they can invest in a private company.”
The SEC aims to have Musk removed from his post at Tesla and barred from serving as an officer or director at a public company. This announcement led to Tesla stock diving 13% to $270, reports Bloomberg.
Steven Peikin, co-director of the SEC’s enforcement division, said: “Corporate officers hold positions of trust in our markets and have important responsibilities to shareholders. An officer’s celebrity status or reputation as a technological innovator does not give license to take those responsibilities lightly.”
The SEC is holding an ongoing investigation into the findings.
In a statement, Musk said: “This unjustified action by the SEC leaves me deeply saddened and disappointed. I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way.”
Tesla’s board of directors added: “Tesla and the board of directors are fully confident in Elon, his integrity and his leadership of the company, which has resulted in the most successful US auto company in over a century.”