The New York Times reports S.E.C. Sues Tesla’s Elon Musk, Seeking to Bar Him From Running a Public Company.
> The Securities and Exchange Commission filed a lawsuit Thursday against Elon Musk, the chief executive of Tesla, accusing him of making false public statements with the potential to hurt investors.
> The lawsuit, filed in federal court in New York, seeks to bar Mr. Musk from serving as an executive or director of publicly traded companies. Tesla, the electric-car maker of which Mr. Musk was a co-founder, is publicly traded.
> The suit relates to an Aug. 7 Twitter post by Mr. Musk, in which he said he had “funding secured” to convert Tesla into a private company.
> The S.E.C. said Mr. Musk “knew or was reckless in not knowing” that his statements were false or misleading. “In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source,” the S.E.C. said in its lawsuit.
> Federal prosecutors in California also have sought information from Tesla, an inquiry that appears to be at an early stage.
From Zero Hedge
What is the SEC seeking? Simple: to bar Musk as an "officer and director":
> The Commission brings this action against Musk pursuant to Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)] to enjoin the transactions, acts, practices, and courses of business alleged in this Complaint and to seek orders of disgorgement, along with prejudgment interest, civil penalties,and an officer and director bar against Musk**.
Here are some of the other highlights:
> This case involves a series of false and misleading statements made by Elon Musk, the Chief Executive Officer of Tesla, Inc. (“Tesla”), on August 7, 2018, regarding taking Tesla, a publicly traded company, private.Musk’s statements, disseminated via Twitter, falsely indicated that, should he so choose, it was virtually certain that he could take Tesla private at a purchase price that reflected a substantial premium over Tesla stock’s then-current share price, that funding for this multi-billion dollar transaction had been secured, and that the only contingency was a shareholder vote.In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source.
Disclosure. I am short Tesla via PUTs.
Flashback August 14
Mike "Mish" Shedlock