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SEC sues Elon Musk for his allegedly misleading tweets

Elon Musk has tweeted himself into serious trouble.The Securities and Exchange Commission sued Tesla'...

Posted: Sep 28, 2018 1:42 PM
Updated: Sep 28, 2018 1:42 PM

Elon Musk has tweeted himself into serious trouble.

The Securities and Exchange Commission sued Tesla's CEO on Thursday for making "false and misleading" statements to investors. It's asking a federal judge to prevent Musk from serving as an officer or a director of a public company, among other penalties.

The complaint hinges on a tweet Musk sent on August 7 about taking Tesla private.

"Am considering taking Tesla private at $420," Musk said. "Funding secured."

The SEC said he had not actually secured the funding.

"In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source," the SEC said in its complaint.

That tweet, and subsequent tweets from Musk over the next three hours, caused "significant confusion and disruption in the market for Tesla's stock," as well as harm to investors, the SEC said. On the day of Musk's tweet, Tesla's stock shot up nearly 9%. It has declined substantially since then.

Tesla's stock dropped more than 11% in after-hours trading Thursday.

"This unjustified action by the SEC leaves me deeply saddened and disappointed," Musk said in a statement. "I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way."

Tesla and its board of directors said in a joint statement that they are "are fully confident in Elon, his integrity, and his leadership of the company."

"Our focus remains on the continued ramp of Model 3 production and delivering for our customers, shareholders and employees," the statement said.

Stephanie Avakian, co-director of the SEC's enforcement division, said at a press conference Thursday that the agency is committed to holding people accountable despite "celebrity status or reputation as a technological innovator."

The complaint alleged that Musk rounded up the go-private price to $420 per share "because he had recently learned about the number's significance in marijuana culture" and thought his girlfriend would find it funny. He was dating the musician Grimes.

Musk did not consult with any board members, employees or outside advisers before he sent the tweets, according to the SEC.

"This is serious. This is what you go after insider traders and market manipulators on," said Charles Whitehead, professor at Cornell Law School. "This is a serious allegation."

Musk abandoned the plan to take Tesla private less than three weeks after he first tweeted about it. He later said his "funding secured" comment was based on talks with Saudi Arabia's sovereign wealth fund, which he said had urged him to take the company private and offered to increase its investment in Tesla.

The Justice Department is also investigating comments made by Musk, Tesla said last week. The company said it had received a voluntary request for documents and is cooperating. Tesla said it had not been subpoenaed.

Shareholders have also filed lawsuits charging that Musk made the claim to manipulate the stock price.

Musk has brought a string of bad headlines down on himself with erratic behavior. He has fired off tweets late at night and brushed off analysts on corporate earnings calls. He disparaged a man who was working to rescue boys trapped in a cave in Thailand, and sparred with journalists and investors he believed were unfair to him. Musk vowed to launch a website called Pravda to critique the media.

-- CNNMoney's Matt Egan and Jackie Wattles contributed to this report.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 293542

Reported Deaths: 6638
CountyCasesDeaths
DeSoto19601229
Hinds18712386
Harrison16569277
Rankin12637263
Jackson12483219
Lee9671160
Madison9420196
Jones7914146
Forrest7159136
Lauderdale6798226
Lowndes6014137
Lamar585880
Lafayette5716113
Washington5182129
Bolivar4599121
Oktibbeha440391
Panola428392
Pearl River4138128
Warren4122113
Pontotoc408068
Marshall400392
Monroe3981126
Union393673
Neshoba3777167
Lincoln3491100
Hancock341674
Leflore3363118
Sunflower317385
Tate301574
Pike299193
Scott292868
Alcorn290760
Itawamba289072
Yazoo284962
Coahoma276367
Tippah276165
Copiah276057
Simpson272778
Prentiss268858
Leake252171
Marion251578
Wayne251541
Covington248278
Grenada246277
Adams233377
George231145
Newton226352
Winston221375
Jasper212744
Tishomingo211965
Attala206369
Chickasaw200851
Holmes181770
Clay178250
Stone171829
Tallahatchie170039
Clarke168971
Calhoun157128
Smith152431
Yalobusha143536
Greene127233
Walthall123640
Noxubee122829
Perry121434
Montgomery121338
Lawrence119521
Carroll117923
Amite110932
Webster110030
Jefferson Davis101231
Tunica98823
Claiborne97929
Benton93324
Humphreys92427
Kemper89623
Quitman77114
Franklin75619
Choctaw69516
Wilkinson62226
Jefferson61927
Sharkey48817
Issaquena1676
Unassigned00

Alabama Coronavirus Cases

Cases: 491849

Reported Deaths: 9869
CountyCasesDeaths
Jefferson707641366
Mobile35937724
Madison32307450
Tuscaloosa24024410
Montgomery22502499
Shelby21848214
Baldwin19698277
Lee14926151
Morgan13624251
Calhoun13202285
Etowah13154319
Marshall11243208
Houston10058259
Limestone9348134
Elmore9345182
Cullman8879179
St. Clair8799221
Lauderdale8588210
DeKalb8436174
Talladega7500163
Walker6509251
Jackson6483102
Autauga622890
Blount6084125
Colbert6004118
Coffee5235102
Dale4627106
Russell402930
Franklin398876
Covington3949106
Chilton386298
Escambia377472
Tallapoosa3572141
Clarke343149
Chambers3399108
Dallas3397141
Pike292972
Lawrence282284
Marion281295
Winston246266
Bibb244560
Geneva238870
Marengo233755
Pickens223954
Barbour210651
Hale209068
Fayette199956
Butler195265
Henry182041
Cherokee176438
Monroe166038
Randolph163140
Washington156334
Crenshaw144054
Clay143454
Macon141643
Cleburne137139
Lamar132432
Lowndes130749
Wilcox121425
Bullock116336
Conecuh106523
Perry105427
Sumter98331
Coosa88623
Greene87132
Choctaw54923
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