The Securities and Exchange Commission (SEC) is ramping up its investigation into Tesla co-founder and chief executive Elon Musk after he tweeted last week that he was considering taking the electric carmaker private, and said “funding secured”, FOX Business’ Charlie Gasparino exclusively reported.
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Tesla shares sank on news of the probe on Wednesday.
| Ticker | Security | Last | Change | %Chg |
|---|---|---|---|---|
| TSLA | TESLA INC. | 334.85 | -12.79 | -3.68% |
“They’re between a rock and a hard place on this one,” Gasparino said. “[On one hand] it looks like what Elon Musk said when he said funding was secured, particularly after his statements recently, was not accurate. They don’t have the funding actually secured. They’re talking to people, what we understand, about the process of going private.”
The San Francisco office of the SEC has sent subpoenas to Tesla regarding its privatization plans and Musk’s statement to determine whether the billionaire inventor intentionally misled investors, Gasparino said. Tesla has also hired two law firms, Paul, Weiss, Rifkin, Wharton & Garrison to help deal with the SEC, and Latham & Watkins to advise on privatization.
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Last week, Musk shocked investors after tweeting that he could take the company private at $420 per share, the stock soared on the news before being halted.
If Musk’s “funding secured” comment turns out to be false, it could be viewed as “misleading,” a former SEC commissioner told FOX Business last week. That could create multiple legal issues for Musk.
Both Tesla and the SEC have declined to comment about the investigation.
