NEW YORK/SAN FRANCISCO (Reuters) - The U.S. Securities and Exchange Commission on Thursday accused Tesla Inc (TSLA.O) Chief Executive Elon Musk of fraud and sought to remove him from his role in charge of the electric car company, saying he made a series of “false and misleading” tweets about potentially taking Tesla private last month.
Musk, 47, is the public face of Tesla and losing him would be a big blow for the money-losing car maker which has a market value of more than $50 billion, chiefly because of investors’ belief in Musk’s leadership.
The Department of Justice, which has the authority to press criminal charges, has also questioned the company about Musk’s tweets, the company said this month.
Tesla shares tumbled 12 percent in after-hours trading.
“Elon is Tesla and Tesla is Elon and that’s great when Elon is scoring touchdowns and grand slams but not so great when there are negative things tied to him,” said Karl Brauer, executive publisher at car research firm Kelley Blue Book.
Musk said he had done nothing wrong. “This unjustified action by the SEC leaves me deeply saddened and disappointed,” 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.”
Tesla’a board said they are “fully confident” in Musk.
The SEC’s lawsuit, filed in Manhattan federal court, caps a tumultuous two months set in motion on Aug. 7 when Musk told his more than 22 million Twitter followers that he might take Tesla private at $420 per share, with “funding secured.”
On Aug. 24, after news of the SEC probe had become known, Musk blogged here that Tesla would remain public, citing investor resistance.
