Tesla CEO Elon Musk Charged For Fraud By The SEC

Elon Musk, CEO of Tesla, has been charged for fraud by the U.S. Securities and Exchange Commission over his tweets that falsely claimed of taking the company private. These tweets allegedly hurt Tesla investors and also disrupted the market.

The company is also expected to be sued, but Tesla has not been named as a defendant in the complaint. The SEC says that Musk made a series of “false and misleading statements” in his tweets about taking the company private.

By doing that, he “caused significant confusion and disruption in the market for Tesla’s stock and resulting harm to investors.”

The tweets in question are these:

Am considering taking Tesla private at $420. Funding secured.

— Elon Musk (@elonmusk) August 7, 2018

Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote. https://t.co/bIH4Td5fED

— Elon Musk (@elonmusk) August 7, 2018

However, a few weeks later, Musk tweeted that plans for privatizing the company have been scrapped arguing “most of Tesla’s existing shareholders believe we are better off as a public company.”

Whereas the SEC said: “In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source.”

Besides financial penalties, the SEC also seeks to remove to Elon Musk from his current position of CEO at Tesla and ban him from leading a public company or serving on the board of one.

In response to this news, Tesla’s stock price also plummeted by more than 13 percent.

Meanwhile, Musk gave a statement to TechCrunch that he is “deeply saddened and disappointed” by this “unjustified action by the SEC.”

Recently, the tech billionaire has been regularly in the news for his erratic behavior — such as smoking weed during a podcast, disparaging a man who rescued boys trapped in a cave in Thailand, and launching a website called Pravda to criticize media.

He even admitted to taking pills for insomnia and that his mental and physical health is taking a toll under pressure.