SEC Sues Tesla CEO Elon Musk

10 minutes ago

Updated at 4:59 p.m. ET

The U.S. Securities and Exchange Commission is suing Tesla CEO Elon Musk for securities fraud a month after he announced that he planned to take the publicly traded electric-car company private.

"Musk's false and misleading public statements and omissions caused significant confusion and disruption in the market for Tesla's stock and resulting harm to investors," the lawsuit says.

On Aug. 7, Musk boasted on Twitter that funding for the switch was "secured."

Those eight words were enough to send the stock soaring — up by nearly 11 percent by the end of the day.

As NPR's Sasha Ingber reported:

"Musk said [later] his tweet was prompted by Saudi Arabia's sovereign wealth fund, which brought up the possibility of taking the company private. Tesla later admitted that it did not have the funding for the deal, and less than three weeks after his tweet, Musk walked back the prospect of going private.

"Short-sellers who had anticipated that Tesla's stock would fall said Musk's tweet was meant to manipulate the shares, according to the Associated Press."

Tesla stock was down nearly 10 percent in after-hours trading.

This is a developing story and will be updated.

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