SEC Says Musk Misled Tesla Investors with Delisting Claim

The U.S. Securities and Exchange Commission has filed a federal lawsuit accusing Tesla Inc. CEO Musk of making false and misleading statements about taking the company private.

The result of those claims, according to a complaint filed earlier today with a U.S. District Court in New York City, was “significant confusion and disruption in the market for Tesla’s stock and resulting harm to investors.”

The complaint cites Musk’s Aug. 7 tweet: “Am considering taking Tesla private at $420. Funding secured.” It asserts that over the following three hours, Musk made a series of additional “materially false and misleading statements” about the plan. In fact, the complaint says, Musk “had not even discussed much less confirmed, key deal terms, including price, with any potential funding source.”

The SEC also says Musk didn’t discuss his statement with anyone before making it and violated NASDAQ rules by failing to notify the exchange in advance.

The complaint petitions the court—without mentioning Tesla by name—to bar Musk from acting as an officer or director of a publicly traded company. The commission also asks that Musk be ordered to return any profits he made when his comments caused Tesla’s stock to rise.

Musk describes the lawsuit as unjustified and insists he has always acted “in the best interests of truth, transparency and investors.”