US regulator sues Tesla boss for fraud

NEW YORK/SAN FRANCISCO: The US Securities and Exchange Commission accused Tesla Inc chief executive Elon Musk yesterday of fraud and sought to remove him from his role in charge of the electric car company, saying he made a series of ‘‘false and misleading’’ tweets.

In a lawsuit, the regulator described Musk (47) surprising members of his own team and investors with a series of tweets, starting with the August 7 announcement that he was thinking of taking Tesla private. Twelve minutes after the first tweet, Tesla’s head of investor relations texted Musk’s chief of staff to ask whether Musk’s announcement was ‘‘legit’’, the SEC said.

Tesla shares tumbled 12% in afterhours trading.

The SEC’s lawsuit, filed in Manhattan federal court, caps a tumultuous two months set in motion on August 7 when Musk told his more than 22 million Twitter followers that he might take Tesla private at $420 per share, with ‘‘funding secured’’.

On August 24, after news of the SEC probe had become known, Musk blogged that Tesla would remain public, citing investor resistance.

The Wall Street Journal reported yesterday that the SEC filed the lawsuit after a proposed settlement with Musk fell apart. The SEC did not immediately respond to a request for comment yesterday.

Musk said he had done nothing wrong. ‘‘This unjustified action by the SEC leaves me deeply saddened and disappointed,’’ he said in a statement.

Tesla’s board said it was ‘‘fully confident’’ in him.