Elon Musk & Tesla

The SEC complaint alleges that Musk issued "false and misleading" statements and failed to properly notify regulators of material company events. The company was also expecting to be sued, though Tesla was not named as a defendant in the complaint. CEO Elon Musk has been sued by the Securities and Exchange Commission (SEC) for fraud Shares of the automaker fell more than 13 percent in extended trading. The stock is roughly 30 percent below its 52-week high of $387.46. Also previously, Tesla-owned SolarCity has been investigated by the SEC multiple times but never disclosed those investigations to shareholders. 

According to the SEC’s complaint against him, Musk tweeted on August 7, 2018 that he could take Tesla private at $420 per share and that the only remaining uncertainty was a shareholder vote.  The SEC’s complaint alleged that, in truth, Musk knew that the potential transaction was uncertain and subject to numerous contingencies. Musk had not discussed specific deal terms, including price, with any potential financing partners. According to the SEC’s complaint, Musk’s misleading tweets caused Tesla’s stock price to jump by over six percent on August 7, and led to significant market disruption.

This was concluded by Musk and Tesla agreeing to settle the charges against them without admitting or denying the SEC’s allegations. The settlements require that Musk will step down as Tesla’s Chairman and be replaced by an independent Chairman, be ineligible to be re-elected Chairman for three years, Tesla will appoint a total of two new independent directors to its board, Tesla will establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications. Musk and Tesla will each pay a separate $20 million penalty. The $40 million in penalties will be distributed to harmed investors under a court-approved process.