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Tesla's Elon Musk accused of fraud


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SEC sue Tesla's Musk for fraud, seek to bar him as officer

By Jonathan Stempel

 

2018-09-27T202709Z_1_LYNXNPEE8Q1SD_RTROPTP_4_TESLA-MUSK-SEC.JPG

FILE PHOTO: Tesla Motors CEO Elon Musk reveals the Tesla Energy Powerwall Home Battery during an event in Hawthorne, California, U.S., April 30, 2015. REUTERS/Patrick T. Fallon/File Photo

 

NEW YORK (Reuters) - U.S. securities regulators on Thursday accused Tesla Inc <TSLA.O> Chief Executive ElonMusk of fraud and sought to ban him as an officer of a public company, saying he made a series of "false and misleading" tweets about potentially taking the electric car company private last month.

 

Musk, 47, is one of the highest-profile tech executives to be accused of fraud by the Securities and Exchange Commission. Losing its public face and guiding force would be a big blow for money-losing Tesla, which has a market value of more than $50 billion, chiefly because of investors' belief in Musk's leadership.

 

Tesla shares tumbled 12 percent in after-hours trading. Tesla was not immediately available for comment.

 

The SEC's lawsuit, filed in Manhattan federal court, comes less than two months after Musk told his more than 22 million Twitter followers on Aug. 7 that he might take Tesla private at $420 per share, and that there was "funding secured."

 

"Neither celebrity status nor reputation as a technological innovator provides an exemption from federal securities laws," Stephanie Avakian, co-director of enforcement at the SEC, told a news conference announcing its charges against Musk.

 

Musk has long used Twitter to criticize short-sellers betting against his company, and already faced several investor lawsuits over the Aug. 7 tweets, which caused Tesla's share price to gyrate.

 

According to the SEC, Musk "knew or was reckless in not knowing" that his tweets about taking Tesla private at $420 a share were false and misleading, given that he had never discussed such a transaction with any funding source.

 

The SEC said he also knew he had not satisfied other contingencies when he declared unequivocally that only a shareholder vote would be needed.

 

Thursday's complaint also seeks to impose a civil fine and other remedies. The SEC does not have criminal enforcement power.

 

On Aug. 24, after news of the SEC probe had become known, Musk blogged that Tesla would remain public, citing investor resistance.

 

(Reporting by Jonathan Stempel in New York; Additional reporting by Pete Schroeder in Washington; Editing by Bill Rigby and Lisa Shumaker)

 
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-- © Copyright Reuters 2018-09-28

 

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I think it's Twitter. There must be some evil code snippet in all that programming that makes high profile users bare their idiocy for all to see, something that interferes with common sense inhibitor protocols...

At a Twitter Anonymous meeting: "Hello, I am Elon Musk and I am a Twitterer,..."

interruption: "No, no. me first. I am Donald Trump..."

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11 minutes ago, klauskunkel said:

I think it's Twitter. There must be some evil code snippet in all that programming that makes high profile users bare their idiocy for all to see, something that interferes with common sense inhibitor protocols...

At a Twitter Anonymous meeting: "Hello, I am Elon Musk and I am a Twitterer,..."

interruption: "No, no. me first. I am Donald Trump..."

Has the time come to ban Twitter because of all the upset it causes.....after all the authorities ban other things that are a lot less harmful. Look at the damage Trump and Musk have done between them on Twitter.

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Just now, Pedrogaz said:

Has the time come to ban Twitter because of all the upset it causes.....after all the authorities ban other things that are a lot less harmful. Look at the damage Trump and Musk have done between them on Twitter.

I think it would be better/easier to ban Trump and Musk.

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Made a false statement he knew not to be true.

 

That caused a volatile fluctuation in the share price of his company whereby many people lost a lot of money, and some made a lot of money particularly if they were in the know.

 

Doubt Vernon will get a penny (or cent or baht) out of this guy, as he will be a broken man long before his deformation case appeals reaches the buffers. 

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