Tesla Turns Over Documents to U.S. Department of Justice

Lester Mason
September 19, 2018

The solar power and electric auto manufacturer is facing a criminal probe by the Department of Justice, federal officials told Bloomberg, over Musk's public proclamation on Twitter on August 7 that he had the "funding secured" to take Tesla private at $420. Bloomberg News reported Tuesday that the U.S. Department of Justice is investigating the company. The existing probe focuses on whether Tesla had issued misleading pronouncements on manufacturing goals and sales targets, according to two people familiar with the matter.

Tesla said it was contacted by prosecutors after Musk tweeted last month while driving to the airport that funding was secured to take the company private.

Tesla stock soared after Musk's tweet, growing the company's market cap by almost $4 billion until trading was temporarily halted.

A British diver who was instrumental in the rescue of youth soccer players trapped in a cave in Thailand is suing Elon Musk, alleging that the SpaceX and Tesla founder falsely accused him of being a pedophile. The US Attorney's Office in San Francisco took the same stance.

Tesla's board then said that it hadn't received a formal proposal from Musk, who's also the company's chairman, nor had it concluded whether going private would be advisable or feasible. This required technicians to undergo weeks of training in California and sometimes purchase new equipment specially designed for Tesla models.

The Securities Exchange Act prohibits publicly traded companies from announcing plans to buy or sell securities if executives don't intend to follow through on the plans, don't have the means to follow through, or are trying to manipulate stock prices.

In a series of tweets on July 15, Mr Musk, who personally delivered the submarine to the cave, wrote that he never saw Mr Unsworth and challenged him to show a video of the final rescue.

He also said Musk "can stick his submarine somewhere where it hurts".

If the Justice Department brings criminal charges against Musk and a trial results in a guilty verdict, the 47-year-old billionaire could face jail time, in addition to any financial penalties, said Jay Dubow, a former branch chief in the SEC's enforcement division. It could instead subject Musk to civil sanctions such as fines, relinquishing improper profits and a ban on running public companies.

Other reports by Iphone Fresh

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