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Elon Musk Is Sued by S.E.C. in Move That Could Oust Him

Matthew Goldstein and Emily Flitter, reporting for The New York Times:

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. […]

The S.E.C. said Mr. Musk “knew or was reckless in not knowing” that his statements were false or misleading. “In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source,” the S.E.C. said in its lawsuit.

I don’t know if he’s going to be forced out, but there’s no question he did exactly what the S.E.C. says he did. There’s no nuance to it. He committed securities fraud in a tweet.

Friday, 28 September 2018