Matt Kimberley profile picture Matt Kimberley 4 years ago

Fraud Lawsuit Could Ban Elon Musk From Running Tesla

Elon Musk has been accused of securities fraud at the highest level, with one very possible outcome that of his messy departure from the company - forever

Remind me later
Tesla - Fraud Lawsuit Could Ban Elon Musk From Running Tesla - News

Elon Musk has been accused of fraud in a lawsuit that could see him banned from being the boss of Tesla – or any other publicly-traded company.

The huge and deeply serious move by the Securities and Exchange Commission (SEC) is in response to Musk’s tweets in August, in which he claimed to have secured funding to take Tesla private again.

The SEC claims that Musk hadn’t even talked about such a deal, let alone agreed terms with any sources of funding. The tweets caused massive volatility of Tesla’s share price and, so the SEC is arguing, harmed investors. The group is now looking to try to place an order on Musk, who also heads SpaceX, to prevent him from leading any company publicly listed on a stock exchange.

Reports within the SEC’s papers, filed in federal court in New York yesterday, show that senior Tesla staff – including the firm’s head of investor relations – had emailed Musk’s chief of staff in astonishment, asking if the tweets were ‘legit’.

Tesla - Fraud Lawsuit Could Ban Elon Musk From Running Tesla - News

At the time the Nasdaq platform actually halted trading because of the confusion thrown up in the wake of Musk’s social media comments. Musk himself, however, has responded by saying that the SEC’s actions were “unjustified” and that he acted in the “best interests of truth, transparency and investors.”

This latest heap of trouble for the beleaguered engineer comes after he had twice accused a British cave diver who had helped rescue a trapped Thai youth football team from flooded caves of being a child abuser.

Earlier this month he smoked marijuana on a live webcast with comedian Joe Rogan. His vulnerability – and volatility – were also on show in a worrying New York Times interview, where he confessed to working 120-hour weeks and taking sedatives.

Meanwhile, Tesla backers have become increasingly frustrated at the electric car giant’s apparent inability to solve production and delivery scale woes for the Model 3 or improve quality control for the Model X.