Share Plunged On ASX After The News On SEC Demands Exit Of Elon Musk Over False Statements

  • Sep 28, 2018 AEST
  • Team Kalkine
Share Plunged On ASX After The News On SEC Demands Exit Of Elon Musk Over False Statements

The chief executive officer or CEO of Tesla (NASDAQ: TSLA), Elon Musk, have been posting false tweets on the social networking site thereby misleading the investors as well as its followers on Twitter. The company’s executive has posted that he would take Tesla private and, as per the tweets, he also confirmed that the funding for the same has been secured. However, it seems like those were the false statements and, as a result, he has been accused by the US Securities and Exchange Commission or SEC. These tweets have been posted on Twitter in the month of August 2018.

Elon Musk also tweeted that in regard to the decision of taking the company private, the support of the investors has been confirmed. Also, he said that, for the investors who would remain with the company (Tesla), special purpose fund could also come up. According to the suit that has been placed against Musk, he tweeted about the funding after having a word with the Saudi Arabia's sovereign wealth fund which was related to the investment, the amount of which was not specified. At the end of the July when he met for the same purpose, the basic terms related to the deal of taking Tesla private were not discussed. 

However, after the news broke out, the shares of Tesla witnessed the significant fall. The commission plans to restrict Elon Musk from running the public companies (including Tesla) and he has also been slapped a fine. The SEC has also commented that the federal securities law sees every individual at the same footing whether he is a tech innovator or a celebrity. Therefore, no one is exempted from the severe repercussions which the target individual is found guilty.

The commission has the power to slap a fine on the company and can also take actions against any company if found guilty. However, the news regarding the lawsuit came a bolt from the blue for the executive at Tesla. Musk describes the action taken by the Securities and Exchange Commission as “unjustified.” The SEC is of the view that the company’s shares have been affected by the false statements which were made by its chief executive. Moreover, these statements have also harmed the market participants.

At the time of writing, the stock price per share is $307.52 which implies the fall of 0.67% (intraday).

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