SEC wants Musk out over tweet

US SECURITIES regulators are asking a federal court to oust Tesla’s Elon Musk as chairman and CEO, alleging he committed securities fraud with false statements about plans to take the company private.

The Securities and Exchange Commission says in the complaint filed yesterday that Mr Musk falsely claimed in an August 7 statement on Twitter that funding was secured to go private at $420 a share, a substantial premium over the price at the time.

The complaint says that Mr Musk (pictured) had not discussed or confirmed key deal terms including price with any funding source. It also asks for an order enjoining Mr Musk from making false and misleading statements along with repayment of any gains as well as civil penalties.

“Corporate officers hold positions of trust in our markets and have important responsibilities to shareholders,” Steven Peikin, co-director of the SEC’s enforcement division, said in a statement.

“An officer’s celebrity status or reputation as a technological innovator does not give licence to take those responsibilities lightly.”

An SEC press release says the agency asked the court for a “bar prohibiting Mr Musk from serving as an officer or director of a public company”.

Mr Musk, in a statement issued by Tesla, called the SEC action unjustified. “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,” the statement said.

The complaint alleges that Mr Musk’s tweet harmed investors who bought Tesla stock after the tweet but before accurate information about the funding was made public.

Ousting Mr Musk, who has a huge celebrity status with more than 22 million Twitter followers, would be difficult and could damage the company.