The Security and Exchanges Commission is bringing forth legal action against Elon Musk. The SEC claims that Musk’s carelessness, erratic behavior and misleading of customers/investors about receiving funding are reasons for this lawsuit as the Commission seek to bar him from serving as the head of a publicly traded company, along with unspecified fines. The SEC went into great detail describing his erratic behavior, which included threatening to “burn” short-sellers who targeted Tesla stock, seeking to amuse his girlfriend, the pop singer Grimes, by weaving in a “marijuana culture” reference (setting the buyout price at USD 420) in his go-private bid.
That being said, Tesla (NASDAQ: TSLA) and its respective board have fully supported Elon Musk, saying that the claims made are baseless and that they are fully confident in his integrity and leadership. As a result, Telsa’s stock has taken a 12% hit. The prospect of Musk being forced to step away could push the stock into freefall.
Musk personally feels that the suit and claims are “unjustified.” He believes he acted with integrity and the investors best interests at heart. “I have always taken action in the best interests of truth, transparency and investors,” he said in a statement. “Integrity is the most important value in my life and the facts will show I never compromised this in any way.”
“Musk’s statements were false and misleading,” Stephanie Avakian, co-director of the SEC’s enforcement division, said at a press conference in Washington. “They lacked any basis in fact.”