The US Securities and Exchange Commission filed a lawsuit against the head of Tesla, Ilona Mask, including due to fraud

Original author: Dave Michaels
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The Securities and Exchange Commission (SEC) filed a lawsuit in court against the head of Tesla Ilona Mask, demanding to remove him from the management of public companies, including the one he created Tesla, because of the deception of investors.

Update link on a full lawsuit in the comments , thanks ustin !

SEC accuses Mask of publishing a series of tweets in August 2018 that contained false information about the imminent redemption of the company's shares. The commission demands to forbid Mask to occupy the positions of a manager or director in a public company.

This lawsuit was filed in court by the SEC after the decision of Mask and his lawyers to abandon the extrajudicial settlement of the dispute, writes The Wall Street Journal.

The terms of the agreement have already been approved by the commission and the publication of a press release was planned for last Thursday. However, before this date, Tesla lawyers withdrew their consent to the agreement, and the SEC eventually decided to file a lawsuit. In the evening trading on Thursday, the company's shares fell by almost 10%. Musk himself called the lawsuit unfounded and stated that the Commission’s actions “deeply disappointed” him. He stated that he had always acted "in the best interests of truth, transparency and investors."

On August 7, Mask wrote in his microblog on Twitter that he was going to buy Tesla at a price of $ 420 per share, that is, with a 20% premium, using borrowed funds. At the same time, he added that "funding is provided." 17 days after the announcement, Musk abandoned plans to make the company private.

According to the Commission, the founder of Tesla did not discuss the deal with potential investors and did not have confirmation of funding. Shares of the company after tweets Mask soared by more than 10%. Given that prices then fell, a number of investors suffered losses.

Earlier, the SEC began investigating statements from the head of Tesla , she also found out why such important information was spread to him through Twitter, and not through more familiar disclosure channels for investors, such as agency tapes.

In accordance with US law, companies and their top managers are not allowed to give false information about significant corporate events.

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