US Securities and Exchange Commission has accused Musk of “false and misleading tweets” regarding taking Tesla private
Jimi Beckwith
28 September 2018

The US Securities and Exchange Commission (SEC) has charged Tesla CEO Elon Musk with securities fraud, stating that his recent tweets about taking the company private were “false and misleading”.  

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.”

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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.”

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Comments
18

28 September 2018

Maybe best if Musk avoids all social media for 6 months and let the cars talk for themselves. 

typos1 - Just can’t respect opinion

28 September 2018
xxxx wrote:

Maybe best if Musk avoids all social media for 6 months and let the cars talk for themselves. 

That would absolutely be the right thing for him to do, and he could probably do with a month off to get some sleep and realise the company won't collapse overnight without him.

He won't of course!

28 September 2018

Big lumpen thing reminded me of a Toad.  Tesla and other Silicon Valley Guff has all the signs of the dotcom bubble at the turn of the century, the US of A has always excelled at producing snake-oil salesmen!

FMS

28 September 2018
xxxx wrote:

Maybe best if Musk avoids all social media for 6 months and let the cars talk for themselves. 

 

Hmmmmmmmmmmmmmmm...yes, you may have a point...except that is how he communicates with those who want to hear from him, quick, efficient and honest. Fly away you TwIT.

28 September 2018

There was a time when I liked Musk and what he was doing, but as time has gone on hes revealed himself to be more and more of a tw*t, he should go, Tesla would be better off without him.

XXXX just went POP.

28 September 2018

Takes personal credit for everything; says whatever he likes; believes anything that comes out of his mouth - and like his most moronic supporters thinks he's a gift to mankind because "look at all my money".

Myk

28 September 2018

He seems to be another example of someone who's great at innovating and free-thinking but terrible at PR.  He really needs to learn to engage his brain before opening his mouth, which seems to be a growing issue, generally. It would be a shame if they ousted him; he just needs to be kept behind the scenes with his Twitter password changed without telling him.

28 September 2018
Myk wrote:

He seems to be another example of someone who's great at innovating and free-thinking but terrible at PR.  He really needs to learn to engage his brain before opening his mouth, which seems to be a growing issue, generally. It would be a shame if they ousted him; he just needs to be kept behind the scenes with his Twitter password changed without telling him.

I'd go the other way:

He's pretty likely to be Person of the Year in 2018 and the ability of SpaceX and Tesla to raise money has been substantially based on Musk's own charisma. They don't advertise either and rely entirely on media interest to get the message out.

Where it has gone a bit wrong is where his method of operating has run counter to the normal standards and practices of the bosses of a public company.

Those who state he's not fit to run a public company should be aware that he's run a public company which has had a 1800% stock growth in 6 years. If you wanted a conventional CEO expect conventional gains.

The SEC are making a big noise about this, the results if found guilty are likely to be slap on the wrist and a small personal fine. It is self defeating to fine the business as that would fine the shareholders too.

It's also amusing that the move on the share price when he tweeted was about the same as when they went public, I suspect that might be brought up at the hearing.

jer

28 September 2018

That's how he is off the cuff but he should be trusting and deferring to advice more. Twitter is one of mankind's most useless inventions. How to put feeling s out there for the media.

28 September 2018

 I seem to remember a certain guy who conned the Uk Government and look what happened to him!

Peter Cavellini.

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