Musk's Tweet Gets Tesla an SEC Subpoena, Sources Say

Sources tell Fox, New York Times the SEC has opened a formal investigation
By Evann Gastaldo,  Newser Staff
Posted Aug 15, 2018 2:29 PM CDT
SEC Subpoenas Tesla Over Musk's Tweet: Sources
In this June 14, 2018, file photo Tesla CEO and founder of the Boring Company Elon Musk speaks at a news conference in Chicago.   (AP Photo/Kiichiro Sato, File)

There were rumblings that the SEC wanted to talk to Elon Musk about his tweet saying he was considering taking Tesla private and had "funding secured." Now, sources tell Fox Business Network, the San Francisco office of the SEC has indeed subpoenaed Tesla and the investigation is a "formal" one. Sources say the "funding secured" part of the tweet was not accurate and that Tesla is simply talking to people about the process of going private, and that the SEC is looking into whether Musk intentionally misled investors with the tweet—a violation of US securities law. Tesla is facing three lawsuits accusing Musk of intentionally and artificially inflating the company's stock price by tweeting that funding had been secured when it actually had not, Business Insider reports.

Reuters' source says the SEC had opened an inquiry into the tweet, and that Tesla's independent board members hired a law firm to help handle the inquiry; on Wednesday, the New York Times also cited a source saying Tesla had been formally subpoenaed by the SEC. Sources earlier told the Times Tesla board members are "lawyering up" in an attempt to protect themselves from fallout related to the tweet and that the board has asked Musk to stop tweeting about privatization plans; Musk, however, has continued to post online about the issue, including a blog post stating Saudi Arabia’s sovereign wealth fund would likely provide funding—an assertion that sources later called into question. (Read more Tesla stories.)

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