The SEC Sues Elon Musk over funding secured Tweet!!

SEC files lawsuit against Tesla chief Elon Musk

In a lawsuit filed in a court in NY, the Securities and Exchange Commission accused Musk of committing fraud by making false public statements with the potential to hurt investors, according to a statement.

The SEC said that Musk arrived at the $420 price by taking the then-current share price and adding 20 percent.

The complaint also faults subsequent tweets in which the entrepreneur said "investor support is confirmed", and that a "special goal fund" might be created for investors who stick with the Palo Alto, California-based company.

The SEC held a press conference where it charged Musk with fraud and announced it would seek to prevent him from serving as an executive or director of a publicly traded company.

Tesla stocks fell about 10 percent in in after-hour trading, following news of the lawsuit.

Pending final judgement from the court, Musk will remain as chief executive at Tesla unless he or its board decide otherwise.

A Tesla spokesperson said earlier this month that the company received a voluntary request for documents from the DOJ following Musk's announcement about taking the company private, and Tesla has been "cooperative".

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The SEC's complaint alleges that "in truth, Musk had not discussed specific deal terms with any potential financing partners, and he allegedly knew that the potential transaction was uncertain and subject to numerous contingencies". It quoted Musk as saying he thought his girlfriend would find it amusing.

The Justice Department is also looking into whether Musk misled investors, Bloomberg News has reported.

The tweet that led to all this was Musk mulling buying out his publicly traded electric vehicle company.

Tesla was not immediately available for comment.

The Securities and Exchange Commission (SEC) is taking lawful action against Tesla co-founder Elon Musk, investigating Musk's claims over secured funding.

CNBC has many more details about the SEC lawsuit; check them out here.

In an emailed statement, Musk said, "This unjustified action by the SEC leaves me deeply saddened and disappointed". He disparaged a man who was working to rescue boys trapped in a cave in Thailand, and sparred with journalists and investors he believed were unfair to him.

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