SEC sues Tesla’s Elon Musk

Commission alleging he lied to investors when he claimed he had secured the funding to go private.

WASHINGTON — The Securities and Exchange Commission sued Tesla Chief Executive Elon Musk on Thursday, saying he lied to investors when he claimed he had secured the funding to take the automaker private.

In a complaint filed in Manhattan federal court, federal regulators said “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 charges are a dramatic setback for one of the tech industry’s most prominent and polarizing executives. The stock plunged more than 10 percent in after-hours trading. The company did not immediately respond.

The SEC said it is seeking to ban Musk from acting as an “officer or director” of any public company, a devastating punishment that would radically change Tesla, Musk’s rocket company SpaceX and his other business interests in solar energy and underground supertrains.

Musk tweeted on Aug. 7 that he had “funding secured” for a massive deal that would take the automaker private, sending its stock soaring that day by nearly 11 percent.

After 17 days, however, Musk announced he would not pursue the deal, leading the stock to plunge amid growing skepticism over Tesla’s long-term prospects. Neither Musk nor Tesla ever specified what funding Musk was referring to.

The Justice Department is separately investigating Musk’s statements to determine whether they were meant to mislead investors, according to a person familiar with the probe.