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US regulator alleges Elon Musk Tesla fraud Regulators accuse Tesla's Elon Musk of securities fraud
(35 minutes later)
The US Securities and Exchange Commission has filed a lawsuit against Tesla chief executive Elon Musk, in which it alleges securities fraud. The Securities and Exchange Commission has filed a lawsuit accusing Tesla boss Elon Musk of securities fraud.
The suit stems from Mr Musk's claim last month that he had secured funding to take the publicly-traded firm private. The US financial regulator says Mr Musk's claims that he had secured funding to take the electric carmaker private were "false and misleading".
The regulator says Mr Musk had made no such plans. They led to confusion in the stock market and harmed investors, according to the complaint.
The lawsuit was filed in the US District Court in Manhattan. The SEC is seeking to bar Mr Musk from acting as an officer or director of a publicly traded company.
It is also seeking financial penalties.
Mr Musk startled the business world last month when he took to Twitter to announce that he was considering a plan that would de-list the company from the stock exchange.
He wrote he had "funding secured" for the plan, which would value Tesla at $420 per share.
The statements "created the misleading impression that taking Tesla private was subject only to Mr Musk choosing to do so and a shareholder vote", according to the SEC complaint.
"In truth and in fact Musk had not even discussed much less confirmed key deal terms, including price, with any potential funding source," it says."In truth and in fact Musk had not even discussed much less confirmed key deal terms, including price, with any potential funding source," it says.
The 7 August tweets took even people within the company by surprise.
"Was this text legit?" the firm's head of investor relations wrote to Mr Musk's chief of staff, according to the complaint.
Weeks later, Mr Musk backed away from the plan, citing investor feedback.
Mr Musk is co-founder of Tesla and has served as chief executive since 2008.
The lawsuit was filed on Thursday in a federal court in Manhattan.
It sent shares of the firm down more than 10% in after-hours trade.