SEC Files Complaint Against Elon Musk for Fraud
"Am considering taking Tesla private at $420. Funding secured."
These 10 words by Elon Musk on Twitter have sparked a fraud lawsuit by the SEC. Read the full complaint below.
How to Thwart an Incredible Career in Ten Words or Less
In less than ten words, Tesla CEO Elon Musk may have created his own demise. Though the country has endured some interesting tweets in the last few years, this one may prove to be the most damaging. The Securities and Exchange Commission (SEC) has filed a complaint against Musk for making "false and misleading" statements to investors, calling for his resignation as an officer and director of a public company.
Consequently, the SEC announcement lead to a one-day 12% drop in Tesla stock, from $307 per share on September 27 to $270 per share on September 28. Tesla's market valuation has fallen by almost a third since the infamous August 7th tweet, accounting for nearly $18 billion in lost market capitalization. Of course, other Tesla-related events have happened in the past six weeks, including the departure of many top level Tesla executives and the now famous weed-smoking interview with Joe Rogan.
The Worse May Be Yet to Come
Musk's pain threshold may see some further testing. Sources say that the Justice Department is also running a criminal investigation regarding this matter, and that the SEC has sent subpoenas to Goldman Sachs and Silver Lake, two investment companies that may have helped Musk try to secure the private funding. Musk wouldn't be the first billionaire to end up in a federal prison over an SEC violation. And probably wouldn't be the last.
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