Elon Musk faces lawsuit from SEC over tweets that are claimed to be deceptive
The Securities and Exchange Commission (SEC) has filed a lawsuit against Tesla CEO Elon Musk for allegedly misleading tweets about taking the company private. The lawsuit, filed on Thursday, accuses Musk of securities fraud for falsely claiming on Twitter that he had secured funding to take Tesla private at $420 per share.
According to the SEC, Musk’s tweets caused significant market disruption and harm to investors. The agency is seeking to prevent Musk from serving as an officer or director of a public company, as well as seeking unspecified monetary penalties.
Musk first tweeted about taking Tesla private on August 7, sending shares soaring by more than 10 percent. The SEC claims that Musk’s statements were false and misleading, as he did not have the necessary funding secured to take the company private at that time.
In response to the lawsuit, Musk issued a statement calling the SEC’s actions “unjustified” and stating that he had always acted in the best interests of investors. He also expressed his disappointment in the SEC’s decision to file a lawsuit.
This is not the first time Musk’s tweets have landed him in hot water with regulators. In 2018, he settled with the SEC over tweets about the possibility of taking Tesla private, agreeing to step down as chairman of the company and pay a $20 million fine.
The lawsuit against Musk highlights the growing scrutiny of executives’ social media activity and the potential legal consequences of misleading statements made on platforms like Twitter. It also serves as a reminder to investors to take social media posts from company executives with caution and to always verify information before making investment decisions.
As the legal battle between Musk and the SEC unfolds, it remains to be seen how this will impact Tesla’s stock price and the future of the company. Investors will be closely watching the developments in this case to see how it will affect Musk’s leadership role at Tesla and the company’s overall performance in the market.
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