SEC sues Musk for civil fraud and demands his removal from Tesla

The Complaint alleges that  Musk met for less than an hour with three representatives of Public Investment Fund, at Tesla’s Fremont, California, plant on July 31 during which the lead representative for the Saudi Arabian sovereign wealth fund expressed interest in taking Tesla private if the terms were “reasonable.”

On Aug. 24, Musk stated that Tesla would remain public, citing investor resistance.

The SEC does not have criminal enforcement powers.  Musk will remain as Tesla’s CEO until the matter was settled legally.

The SEC says Musk calculated the US$420 price per share based on a 20 percent premium over that day’s closing share price.

The suit seeks to bar Musk from serving as an executive or director of publicly traded companies like Tesla.

The call to bar Musk as an officer of any public company is unusual for the SEC against the CEO of a well-known firm. It is unlikely that this will happen and highly likely that the case will be settled for a monetary payment.

Musk has frequently used Twitter to criticize short-sellers betting against his company