SEC sues Elon Musk over "misleading tweets"

The SEC's complaint seeks to bar Musk from serving as an officer or director of a public company.

The Securities and Exchange Commission (SEC) on Thursday charged Tesla CEO Elon Musk with securities fraud over "a series of false and misleading tweets" about potentially taking Tesla private. In its complaint, the SEC seeks to bar Musk from serving as an officer or director of a public company.

Tesla shares were down more than 10 percent in after-hours trading.

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The charges stem from Musk's Aug. 7 tweets, in which he claimed he could take Tesla private at $420 per share -- giving the electric car company a valuation much higher than its market cap. Musk also tweeted that funding was "secured," raising questions about who would provide the funding and whether such information was being properly disclosed.

In a release, the SEC said, that "in truth, Musk had not discussed specific deal terms with any potential financing partners, and he allegedly knew that the potential transaction was uncertain and subject to numerous contingencies." The tweets, Thursday's complaint says, amount to a violation of antifraud provisions of the federal securities laws.

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"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 license to take those responsibilities lightly."

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