SEC files complaint against Tesla's Elon Musk

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SEC files complaint against Tesla's Elon Musk

Steven Peikin, SEC co-director of enforcement, told reporters Thursday that Tesla's investor relations department had scrambled to contain the fallout from Musk's tweets, falsely assuring investors the matter was effectively a done deal.

The SEC said he also knew he had not satisfied other contingencies when he declared unequivocally that only a shareholder vote would be needed.

In its filing, the SEC said the August statements were "false and misleading" and Musk had never discussed the plans with company officials or potential funders.

The complaint comes a day after Musk and his lawyers chose to fight the case rather than settle the charges and the billionaire said he was "saddened" by SEC's decision to sue him.

Tesla's board of directors also said in a statement that it was "fully confident in Elon, his integrity, and his leadership of the company, which has resulted in the most successful USA auto company in over a century". Musk has called the action "unjustified", explaining that he acted in the "best interests of truth, transparency and investors".

But the company's shares tumbled more than 12 per cent in after-hours trading after the S.E.C. filed its lawsuit.

It sought unspecified monetary penalties and added a market-rattling request - that a judge bar Musk from serving as an officer or director of a public company. "Our focus remains on the continued ramp of Model 3 production and delivering for our customers, shareholders and employees". The company has since abandoned the idea, but the tweet led some to question Musk's motives, especially because it caused a boost in Tesla's stock.

That brief tweet was enough to send the stock soaring - up by almost 11 percent by the end of the day.

At the time the Nasdaq platform actually halted trading because of the confusion thrown up in the wake of Musk's social media comments.

The SEC has sued Elon Musk over an alleged "series of false and misleading statements" made on August 7, the day of the initial tweet. A Tesla spokesman said DOJ investigators had requested documents last month and that the company had complied.

The suit, filed with the US District Court for the Southern District of NY, is centered around a "series of false and misleading statements" made by Elon Musk.

In July Musk got into a high profile spat with one of the British divers who helped rescue a group of young soccer players from a cave in Thailand.

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