Elon Musk Sued By The US Government For Bamboozling Investors

Elon Musk is being sued by the SEC

Musk may have turned down the settlement because it would have made it harder to fight a criminal case, legal experts told The Post. The deal reportedly would have also required Tesla to add two independent directors to its board.

Tesla did not respond to a request for comment.

Musk denied the charges, saying in a statement, "This unjustified action by the SEC leaves me deeply saddened and disappointed".

Tesla might be able to thrive without Musk if it could replace him with a more experienced automotive or technology veteran who has been at the helm of a profitable company, said Karl Brauer, executive publisher of Kelley Blue Book.

The Securities and Exchange Commission filed a lawsuit against Tesla CEO Elon Musk on Thursday, seeking his ouster from the publicly traded company he founded over a tweet the mogul sent in August. It would have been the largest such transaction of its kind. It alleges investors were misled by Musk's claims that he'd worked out funding to take Tesla private at a premium of $420 a share, a number that Musk later conceded was meant to be a humorous marijuana reference, according to the SEC suit.

It's not clear that Musk will be removed, as he is denying the allegations, but the possibility jolted investors because Musk is seen as nearly synonymous with Tesla.

Musk pulled out of a settlement with the SEC in which he and Tesla would have had to pay a nominal fine, CNBC reported, citing sources it didn't identify.

But that might depend on Musk - who owns a roughly 20 per cent stake in Tesla - being willing to accept a less visible role at the company. It is unclear if Musk will step down and what the company would be like without him at the helm.

Tesla Will Now Make Its Own Car Carriers
After characterizing the building of the Model 3 "production hell", CEO Elon Musk now faces a new dilemma: Delivering the Model 3. Some stores have more Model 3s on their lot than they can accommodate as the cars wait for their new owners to arrive.

Since then, the company has slowly but surely increased Model 3 production, even reaching a 5,000 unit/week production rate last quarter, if only for a short period of time.

That same fund invested over $1 billion in American electric auto manufacturer Lucid Motors earlier this month, a sign that it was moving away from Musk and Tesla.

Wall Street analysts have been growing more critical of Tesla in recent months, and there was a flurry of bearish notes on Friday. Breakingviews cleverly posits that a Musk-less Tesla will reveal the true value of the innovative but financially challenged company.

"The lesson for CEOs is that the rules apply to everyone including highly successful visionaries", said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware. "The consequences of not settling it are a lot worse, and this is a pretty straightforward case for the SEC".

The SEC, in its suit, said Musk, when he made the August 7 tweet, "knew that he had never discussed a going-private transaction at $420 per share with any potential funding source".

Shares were last down 10.8% at $274.17 in trading before the bell in NY, which would wipe about $6 billion off Tesla's market value.

Tesla's shares plunged on the prospect of life after Musk.

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