Things are not going too well for Elon Musk. The Tesla CEO is getting sued by the Securities Exchange Commission for misleading shareholders by tweeting that he had “secured funding” for taking Tesla private.
Musk’s tweet in early August tweet led to a 10 percent drop in company value before the close of the day.
Apparently, Musk was referring to more funding from Saudi investors in the tweet, but the rest of the company had not quite been onboard with the decision when he made the tweet.
The Securities and Exchange Commission announced yesterday that it is suing Elon Musk, the CEO of Tesla, for an irresponsible and misleading tweet he made on Twitter.
It was irresponsible of Musk, as the CEO of a $50 Billion, publicly traded company, to tell his over 22 million followers something without much groundwork.
Musk has since retracted and on August 24, the company confirmed that they would not be pursuing a buyout. However, the regulators are not letting the issue go and now the SEC has filed a suit against him.
SEC’s complaint held that Musk fabricated the August claim, causing Tesla’s shares to rise since he had not really confirmed the key terms and conditions of the deal with any potential funder.
Musk is disappointed in SEC’s action. “This unjustified action by the SEC leaves me deeply saddened and disappointed,” Musk said in a statement to CNBC.
The lawsuit doesn’t bode well for Musk and may have put his job at risk.