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Tesla Roadster Photo: Supplied
 
 
David McCowen | Oct, 01 2018 | 0 Comments

Tesla chief executive Elon Musk could be barred from running the electric car company under action pursued by US authorities.

The Securities Exchange Commission has accused Musk of fraudulently misleading the stock market by tweeting on August 7 that he was “considering taking Tesla private at $420. Funding secured”. Musk’s tweet resulted in a spike in Tesla’s share price, harming short-sellers betting against the electric car concern.  

SEC co-director Stephanie Avakian told reporters Musk’s statement was “false and misleading”, as Musk did not have backing in place to buy out shareholders at a higher rate than shares were trading for.

The SEC has sought to make an example of Musk, with Avakian saying “neither celebrity status nor reputation as a technical innovator provide exemption from federal securities laws”. 

“The SEC’s complaint… seeks a finding that Musk committed securities fraud, an injunction prohibiting him from doing so in the future, civil penalties, discouragement of any ill-gotten gains and a bar prohibiting Musk from serving as an officer or director of a public company in the future,” she said.

Tesla released a statement saying Musk was “deeply saddened and disappointed” by the SEC action, asserting he “never compromised” his integrity.

Reports published by the Wall Street Journal and other outlets suggest Musk brokered a deal with the SEC before the arrangement fell through this week.

 
Filed under electric vehicle tesla
 
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