The US Securities and Exchange Commission (SEC) has initiated legal proceedings against Tesla's CEO Elon Musk. This is following a tweet he sent earlier in 2018 which regulators are alleging was a "false and misleading" method of securing funding.
Elon shocked the world in August 2018 when he tweeted plans to de-list the electric car company and take it private:
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
However, Musk had not secured funding at the time nor had he discussed the move with other board members, many of whom made their confusion known on social media.
The SEC has accused Musk of creating "the misleading impression that taking Tesla private was subject only to Mr Musk choosing to do so and a shareholder vote," according to the complaint it filed this week in New York federal court.
"Integrity is the most important value in my life and the facts will show I never compromised this in any way," said Musk in a statement.
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Musk disagrees with the appraisal claiming the body's actions are "unjustified". Additionally, according to Musk, he reached the $420 share price because he thought 20% was the "standard premium" when taking a company private.
However, when his calculations took him to $419 he apparently rounded it up to $420 to amuse his girlfriend, Canadian singer Grimes, because of the numbers relevance in cannabis culture.
Regulators will also be seeking financial penalties due to the potential harm of Musk's claims. Stephanie Avakian, co-director of the SEC's enforcement division, said: "Taking care to provide truthful and accurate information is among a CEO's most critical obligations.
"That standard applies with equal force when the communications are made via social media or another non-traditional form," she added.