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Wonkie 09-27-2018 04:23 PM

Raid Suspension: Elon Musk
 
SEC charges Tesla CEO Elon Musk with fraud

Quote:

Tesla CEO Elon Musk has been sued by the Securities and Exchange Commission for fraud, according to court documents filed Thursday. Sources close to the company told CNBC the company was also expecting to be sued, though Tesla was not named as a defendant in the complaint.

Shares of the automaker fell roughly 10 percent in extended trading Thursday.

The SEC complaint alleges that Musk issued "false and misleading" statements and failed to properly notify regulators of material company events. The SEC plans to hold a press conference at 5 pm E.T.

In August, Musk tweeted that he was considering taking Tesla private, adding "funding secured." The tweet spurred a scandal-ridden fall for Tesla and sent the stock see-sawing for weeks.


Elon Musk

@elonmusk
Am considering taking Tesla private at $420. Funding secured.

9:48 AM - Aug 7, 2018
87.8K
22.3K people are talking about this
Twitter Ads info and privacy
Musk later explained that he had been in discussions with the Saudi Arabian sovereign wealth fund and felt confident the funding would come through at his proposed price of $420 per share.

The SEC, in its complaint, alleged:

Musk knew that he (1) had not agreed upon any terms for a going-private transaction with the Fund or any other funding source; (2) had no further substantive communications with representatives of the Fund beyond their 30 to 45 minute meeting on July 31; (3) had never discussed a going-private transaction at a share price of $420 with any potential funding source; (4) had not contacted any additional potential strategic investors to assess their interest in participating in a going-private transaction; (5) had not contacted existing Tesla shareholders to assess their interest in remaining invested in Tesla as a private company; (6) had not formally retained any legal or financial advisors to assist with a going-private transaction; (7) had not determined whether retail investors could remain invested in Tesla as a private company; (8) had not determined whether there were restrictions on illiquid holdings by Tesla's institutional investors; and (9) had not determined what regulatory approvals would be required or whether they could be satisfied.

The complaint also alleges Musk tweeted the statement without the input of other Tesla executives.

"At 1:00 PM EDT, approximately 12 minutes after Musk published his tweet stating, 'Am considering taking Tesla private at $420. Funding secured,' Tesla's own head of Investor Relations sent a text to Musk's chief of staff asking, 'Was this text legit?'," the complaint says.

Musk said in an interview with The New York Times that he calculated a take-private price of $420 by rounding $1 up from what would have been a 20 percent upside at the time.

"According to Musk, he calculated the $420 price per share based on a 20% premium over that day's closing share price because he thought 20% was a 'standard premium' in going-private transaction," the SEC alleged in its suit. "This calculation resulted in a price of $419, and Musk stated that he rounded the price up to $420 because he had recently learned about the number's significance in marijuana culture and thought his girlfriend 'would find it funny, which admittedly is not a great reason to pick a price.'"

In the hours after the initial tweet, Musk doubled down on the proposal in subsequent tweets. The SEC cited those subsequent tweets in the complaint as additional misleading statements.

Musk also failed to properly notify regulators about his plans to take the company private, the complaint alleges.

Tesla's board of directors initially formed a special committee to evaluate the take-private proposal, and Musk said he had hired financial advisors to assist with the plans. Musk ultimately called off the privatization plans on Aug. 24.

Tesla said earlier this month the Department of Justice was also looking into the Aug. 7 tweet.

Tesla did not immediately respond to request for comment.

ScaringChildren 09-27-2018 04:27 PM

Elon Musk goes after the media.

The media takes him down.

Sounds about right.

zodium 09-27-2018 04:29 PM

This is good for Bitcoin.

clevergirl 09-27-2018 04:37 PM

I really want wonkies educated opinion on this one, before even attempting to process and forumulate my own.

Thanks for your dutiful journalism Wonkiesan.

Wonkie 09-27-2018 04:38 PM

he was no angel

Patriam1066 09-27-2018 09:49 PM

He’s really ducking with my stock portfolio

Ahldagor 09-27-2018 10:04 PM

SEC doesn't fuck around. Elon knew what he was doing tho'. The hair plugs didn't sap that much intelligence.

Wonkie 09-29-2018 08:05 PM

looks like it's a ban

Baler 09-29-2018 10:56 PM

He shouldn't have gotten high that one time.
https://i.imgur.com/wQUGt4U.gif

mickmoranis 09-29-2018 11:08 PM

God bless the zog! Right liberals?


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