SEC files lawsuit against Tesla CEO Elon Musk for fraud

The U.S. Securities and Exchange Commission has filed a lawsuit against Tesla CEO Elon Musk for alleged securities fraud.
Ro Aram reports.
According to court documents filed Thursday, the SEC claimed that Musk issued "false and misleading" statements and failed to notify regulators of material company events.

"Musk's statements misled members of the investing public believe that it was virtually certain he could take Tesla private at a price of $420 per share which was a substantial premium over its share price at that time because funding for this proposed transaction had been secured and the only contingency remaining was a shareholder vote. The market reacted to this information and Tesla's stock price quickly traded up. We allege that Musk's statements were false and misleading because they lacked any basis in fact."

The remarks were in reference to an August tweet, in which Musk claimed he had funding lined up to take Tesla private.
He later explained that he had been in discussions with the Saudi Arabian sovereign wealth fund and felt confident the funding would come through at his proposed price of $420 per share.
He pulled back plans to go private weeks later, citing investor feedback.
The debacle sent Tesla's stock price see-sawing for weeks.
It fell more than 11 percent in after-hours trading on Thursday following news of the lawsuit.
The SEC is seeking to bar Musk from serving as an officer or director of a public company, as well as unspecified monetary penalties.
In a statement Musk called the action "unjustified", adding that he acted in the "best interests of truth, transparency and investors"....
... and that he never compromised his integrity.
Ro Aram, Arirang News.