Tesla CEO Elon Musk has been facing huge problems for his tweets on making Tesla private. He got sued by the Securities and Exchange Commission (SEC) on Thursday for charges of fraud with “false and misleading” statements and failed to properly notify regulators of material company events.
Below is the tweet that is creating so many problems for Musk:
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Musk had later explained that he had been in talks with the Saudi Arabian sovereign wealth fund and was confident about the funding at his proposed price of $420 per share.
As it happens with anything related to Elon Musk, the shares of Tesla showed very high volatility. Price of shares fell more than 13 percent in extended trading Thursday and it is roughly 30 percent below its 52-week high of $387.46.
If he is found guilty in the case, SEC may look to remove Musk from serving as an officer or director of the company.
Talking about this, Stephanie Avakian, co-director of the SEC’s division of enforcement, said during the press conference.
“A chairman and CEO of a public company has important responsibilities to shareholders. Those responsibilities include the need to be scrupulous and careful about the truth and accuracy of statements made to the investing public, whether those statements are made in traditional forms such as a press release or an earnings call or through less formal methods such as Twitter or other social media.”
Musk has called these allegations “unjustified” and said he “never compromised” his integrity.
“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,”
he said in a statement to CNBC.”
