Musk faces inquiry into tweets about taking Tesla private

Tesla Elon Musk Tesla Tesla delivery logistics electric cars Tesla Model 3 production North America vehicle delivery Tesla investors Model 3 production targets Elon Musk smoking marijuana

Tesla Inc (TSLA.O) said on Tuesday the U.S. Department of Justice was investigating Chief Executive Elon Musk's public statements in August that he was considering taking the electric auto maker private, the latest and biggest threat to Musk's leadership. The criminal inquiry is still in its early stages, one of the sources was quoted as saying, and there's no guarantee that charges will be brought.

The feud between the 63-year-old United Kingdom diver and the Tesla CEO started over a mini-submarine Musk sent to help with the rescue in northern Thailand. Tesla shares dropped to 7.9% today after news broke about the possible investigation.

The company is reportedly being investigated for fraud after Musk rattled investors last month when he announced on Twitter that he was considering taking the company private, a process for which he claimed funding had already been "secured".

Tesla didn't have an immediate comment. Tesla did not say whether the Justice Department probe was criminal or civil.

The investigation by the US attorney's office in the Northern District of California follows a subpoena issued by the Securities and Exchange Commission seeking information from the maker of electric cars about Musk's plans to go private, which he has since abandoned.

The electric automaker and its billionaire chief are also facing a Securities and Exchange Commission investigation and multiple shareholder lawsuits over the announcement from Musk, who tweeted that he had "funding secured" to complete the deal. They might also scrutinize Tesla's accounting practices and whether investors were misinformed about the health of the business, according to media reports.

The Palo Alto, California, company co-operated with the request and believes the matter should be resolved quickly once federal prosecutors review information they have received, according to a company statement.

Mr Unsworth became a target for Mr Musk after cave rescuers rejected Mr Musk's offer of a mini-submarine created by his rocket company SpaceX to rescue the soccer players and coach, who were finally freed after 18 days in the cave on July 10.

After news of the potential criminal investigation surfaced, Tesla stock tumbled 3.4 percent.

Morton was a former CFO for Seagate Technology PLC, and he joined the company just one day before Musk issued the tweet to take the company private. Sure, Musk's going-private tweet certainly caught the DOJ's attention, but the breadth and depth of the probe is pretty much unknown.

Related:

Comments


Other news