Embattled Musk accused of fraud over Tesla tweets
BILLIONAIRE tycoon Elon Musk is being sued by regulators in the US over ‘ false and misleading claims’ over his electric car company Tesla.
Mr Musk, 47, made the statements on Twitter, when he told his 22million followers that he had the funds for a buyout of California-based Tesla, valuing the business at around £53billion.
Tesla shares jumped about 11 per cent on the Nasdaq stock market following the August 7 tweet. However, on August 24 Musk said he would instead keep the company listed on the stock exchange, citing resistance from the firm’s investors.
In court documents filed yesterday in New York, the Securities and Exchange Commission said: ‘Musk’s statements, disseminated via Twitter, falsely indicated that, should he so choose, it was virtually certain that he could take Tesla private at a purchase price that reflected a substantial premium over Tesla stock’s then-current share price. In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source.
‘Musk’s false and misleading public statements and omissions caused significant confusion and disruption in the market for Tesla’s stock and resulting harm to investors.’
The civil case could see him barred from running public companies, which would include Tesla, and a slapped with a huge fine. Around £4.5billion was wiped off Tesla’s £40billion stock market value last night in after-hours trading as the case emerged. Musk is leading the global race to bring electric cars to mass market with Tesla, and has also upended the rocket industry with his other company, SpaceX.
However, concerns have been raised for his wellbeing in recent months. As well as the Tesla tweet, he is being sued for libel by British cave diver Vernon Unsworth who was involved in the rescue of Thai football team that became trapped in the Tham Laung cave, after Mr Musk claimed he was a child abuser. The entrepreneur also came under fire after he gave an online interview while smoking marijuana in California, where it is legal, last month.
He recently claimed the past year had been the most difficult and painful of his career, as Tesla raced to hit production targets.
Steven Peikin, co- director of the SEC’s Enforcement Division, said last night: ‘Corporate officers hold positions of trust in our markets and have important responsibilities to shareholders. An officer’s celebrity status or reputation as a technological innovator does not give license to take those responsibilities lightly.’
The SEC’s complaint alleges that Musk published his messages about taking Twitter private using his personal Twitter account from his mobile phone, without discussing them with anyone else or telling Nasdaq, as is required.
Tesla confirmed earlier this month that it had also been asked for documents by the US Department of Justice over the Tweets, and was cooperating with authorities.
Mr Musk said: ‘This unjustified action by the SEC leaves me deeply saddened and disappointed ... Integrity is the most important value in my life and the facts will show I never compromised this in any way.’