The lawsuit comes on the heels of Musk's August tweet saying he was ready to take Tesla private.
Abrar Al-HeetiVideo producer / CNET
Abrar Al-Heeti is a video host and producer for CNET, with an interest in internet trends, entertainment, pop culture and digital accessibility. Before joining the video team, she was a writer for CNET's culture team. She graduated with bachelor's and master's degrees in journalism from the University of Illinois at Urbana-Champaign. Though Illinois is home, she now loves San Francisco -- steep inclines and all.
ExpertiseAbrar has spent her career at CNET breaking down the latest trends on TikTok, Twitter and Instagram, while also reporting on diversity and inclusion initiatives in Hollywood and Silicon Valley.Credentials
Named a Tech Media Trailblazer by the Consumer Technology Association in 2019, a winner of SPJ NorCal's Excellence in Journalism Awards in 2022 and has twice been a finalist in the LA Press Club's National Arts & Entertainment Journalism Awards.
Cars are Andrew's jam, as is strawberry. After spending years as a regular ol' car fanatic, he started working his way through the echelons of the automotive industry, starting out as social-media director of a small European-focused garage outside of Chicago. From there, he moved to the editorial side, penning several written features in Total 911 Magazine before becoming a full-time auto writer, first for a local Chicago outlet and then for CNET Cars.
"Musk's false and misleading public statements and omissions caused significant confusion and disruption in the market for Tesla's stock and resulting harm to investors," the SEC said in a complaint filed Thursday in US District Court in New York.
The SEC wants Musk "prohibited from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act."
"This unjustified action by the SEC leaves me deeply saddened and disappointed," Musk said in a statement. "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."
"We believe our actions have the most impact when they're brought most closely in time to the events that bring them forth," Steven Peikin, co-director of the SEC's Enforcement Division, said when asked why the agency had acted so quickly.
The $420 price per share was calculated "based on a 20 percent premium over that day's closing share price because he thought 20 percent was a 'standard premium' in going-private transactions," the SEC alleges in its complaint. The complaint quotes Musk as saying "he rounded the price up [from $419] to $420 because he had recently learned about the number's significance in marijuana culture and thought his girlfriend 'would find it funny, which admittedly is not a great reason to pick a price.'"
In popular culture, 420 refers to smoking pot in the afternoon.
Watch this: SEC sues Elon Musk for securities fraud over misleading tweets
"Musk knew or was reckless in not knowing that his August 7 statements were false and misleading," the SEC wrote in the complaint.
Watch this: Elon Musk considers privatizing Tesla
"Neither celebrity status nor a reputation as a technological innovator provide an exemption from the federal securities laws," Stephanie Avakian, co-director of the SEC's Enforcement Division, told reporters Thursday.
First published Sept. 27 at 1:30 p.m. PT. Update, 2:34 p.m.: Adds information from SEC press conference and Musk's statement to Recode. Update: 3:05 p.m.: Adds more information from complaint. Update, 3:14 p.m.: Adds Musk's statement to CNET.
Security: Stay up-to-date on the latest in breaches, hacks, fixes and all those cybersecurity issues that keep you up at night.
Blockchain Decoded: CNET looks at the tech powering bitcoin -- and soon, too, a myriad services that will change your life.