Tesla CEO Elon Musk has been named as the sole defendant in a lawsuit filed by the United States Securities and Exchange Commision on Thursday.
The suit, filed with the US District Court for the Southern District of New York, is centered around a "series of false and misleading statements" made by Elon Musk.
Tesla was not named as a party in the complaint.
The SEC alleges that Musk "falsely indicated" on Twitter that "funding was secured" for a deal to take the company private at $420, which was more than 20% higher than the company's trading price at the time.
"In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source," the SEC said in the complaint.
According to the SEC, these statements and omissions "caused significant confusion and disruption in the market for Tesla's stock and resulting harm to investors."
Tesla's stock price and trading volume skyrocketed in the wake of Musk's tweets.
The SEC's complaint points to four specific tweets by Musk.
The first tweet in question was posted by Musk at 12:48 p.m. on August 7, stating: "Am considering taking Tesla private at $420. Funding secured."
Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk) August 7, 2018
Over the next few hours, Musk followed up by posting three more tweets containing what the SEC calls "additional materially false and misleading statements."
At 2:00 p.m., the Tesla CEO tweeted "My hope is *all* current investors remain with Tesla even if we're private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity's SpaceX investment."
My hope is *all* current investors remain with Tesla even if weâ€™re private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelityâ€™s SpaceX investment.— Elon Musk (@elonmusk) August 7, 2018
At 2:13 p.m., Musk followed with: "Shareholders could either to sell at 420 or hold shares & go private."
Shareholders could either to sell at 420 or hold shares & go private— Elon Musk (@elonmusk) August 7, 2018
At 3:36 p.m., Musk tweeted, "Investor support is confirmed. Only reason why this is not certain is that it's contingent on a shareholder vote."
"This unjustified action by the SEC leaves me deeply saddened and disappointed," Elon Musk said in a statement to Business Insider on Thursday. "I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way.
Also from Business Insider South Africa: