Tesla’s chief executive Elon Musk is being sued by the United States Securities and Exchange Commission (SEC) to trick investors into saying they would have guaranteed financing to make the company private again.
This statement by Musk was made in a tweet posted on August 7. “I’m considering making Tesla private for $ 420 [per share]. Guaranteed funds, “said the businessman at the time. According to the SEC, he had no guarantee of this when he posted the tweet, which led to a 10% rise in company stock that day.
In the complaint document, the agency classifies the tweet information as “fake” and “misleading” and says Musk was “inconsequential” in doing so knowing he could not secure the investments.
In the week following the publication of the tweet, the businessman even said that a potential partner to make Tesla private would be Saudi Arabia’s Sovereign Fund, but these discussions were only at the preliminary stage, with no details of the terms being put in the pipeline.
As The Verge informs, SEC punishments often involve fines for those who violate the rules of the market, but it has the autonomy to remove people from the direction of companies that publicly trade their actions. In addition to this, Musk is being criminally investigated by the United States Department of Justice because of the same tweet.