Elon Musk is in hot water after the Securities and Exchange Commission (SEC) announced Thursday that they would be charging him with fraud over his attempted privatization of Tesla. Musk has flirted with the idea of making Tesla a private company for years, but the SEC complaint is centered around a tweet Musk made last month,
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
The SEC alleges that the Tesla CEO was reckless in reporting false information to investors in the hopes of driving up investments and stock prices. Board members, investors and employees said they were not briefed before Musk made the tweet. Musk has since withdrawn his statement, and is currently in the process of negotiating a settlement with the SEC.
Tesla stocks dropped almost 14 percent on Friday, suffering its worst loss since November 2013.
If the charges go through, Musk will be prohibited from serving as the officer of any public company in the future, and will likely be removed from his position as Chief Executive Officer of Tesla. The privatization of Tesla hangs in the balance as Elon Musk negotiates a settlement with the SEC and waits to see his fate with his company.