TESLA TROUBLES. SEC Sues Elon Musk for Fraud. “Tesla and its board said they were “fully confident in Elon, his integrity, and his leadership..” By Todd Horwitz, Bubba Trading

 


Elon Musk, Tesla’s chief executive, was accused by federal regulators on Thursday of misleading investors with false public statements, a move that could force him out of the company’s leadership. At issue is Mr. Musk’s declaration on Twitter last month that he had “funding secured” to buy out the stock of the electric-car maker. The prospect created a firestorm on social media and in the markets that sent Tesla’s shares soaring.

In a lawsuit filed in federal court in New York, the Securities and Exchange Commission accused Mr. Musk of committing fraud by making false public statements with the potential to hurt investors. The suit seeks to bar Mr. Musk, who is also Tesla’s chairman, from serving as an executive or director of publicly traded companies like Tesla. Such a punishment is one of the most serious remedies the S.E.C. can impose against a corporate executive.

“This unjustified action by the SEC leaves me deeply saddened and disappointed,” Mr. 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 said in a statement they were “fully confident in Elon, his integrity, and his leadership of the company.”

The SEC had crafted a settlement with Mr. Musk—approved by the agency’s commissioners—that it was preparing to file Thursday morning when Mr. Musk’s lawyers called to tell the SEC lawyers in San Francisco that they were no longer interested in proceeding with the agreement, according to people familiar with the matter. After the phone call, the SEC rushed to pull together the complaint that it subsequently filed, the people said.

Todd “Bubba” Horwitz

IN ASSOCIATION WITH

Financial Markets and Political Commentary

 

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Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.