Elon Musk faces SEC lawsuit over alleged securities fraud

Elon Musk, founder and CEO of Tesla, is facing a lawsuit by the US Securities and Exchange Commission over alleged securities fraud.

The suit seeks to bar Musk from acting as an executive or director of a publicly traded company.

Elon Musk is the the founder, CEO and CTO of SpaceX; co-founder, CEO and product architect of Tesla Motors; co-founder and chairman of SolarCity, co-chairman of OpenAI.

The SEC says that claims made by Musk that he had secured funding to make Tesla private were “false and misleading”.

On August 7, Musk tweeted: “Am considering taking Tesla private at $240. Funding Secured.”

However, Musk called off plans to privatize Tesla on August 22, saying “most of Tesla’s existing shareholders believe we are better off as a public company.”

The SEC complaint, which was filed on Thursday in federal court in New York, said that the statements made by Musk “created the misleading impression that taking Tesla private was subject only to Mr Musk choosing to do so and a shareholder vote”.

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

On Thursday, Elon Musk said that the SEC’s allegations of fraud were unjustified. 

Mr. Musk said in a statement distributed by Tesla:

“This unjustified action by the S.E.C. 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.”