Published: Sat, August 18, 2018
Business | By Tara Barton

SEC slaps Tesla with a subpoena over Elon Musk tweets, report says

SEC slaps Tesla with a subpoena over Elon Musk tweets, report says

After Musk dropped his bombshell, Tesla's stock surged 11 per cent in one day, damaging a class of investors who had been betting the company's shares would decline. Tesla has been operating at a loss and is now being sued by investors who claim that Musk's tweets were "false and misleading".

Mr Musk claimsSaudi Arabia's sovereign wealth fund has been pushing to take the electric auto maker private for the past two years and is still interested.

Tesla's board of directors has been attempting to limit the fallout from Musk's actions, with some members asking the CEO to stop tweeting.

Reuters reported on Wednesday that the PIF's other commitments in Saudi stocks and other investment projects would mean it was unlikely to play a significant role in any Tesla buyout.

A subpoena "typically requires the approval of top SEC officials", the newspaper added. "Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction".

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They found that long-term investments declined at companies that were required to step up the frequency of their reporting. Quarterly financial reports are a staple of US corporate practice.

The proposal for Saudi Arabia to finance Tesla's privatization may prove hard due to Saudi Arabia's Public Investment Fund (PIF) being tied up in other investments, and Saudi Arabia's illiquid market.

More Money: Priced out of the market? Tripp then filed a formal whistleblower tip to the U.S. Securities and Exchange Commission alleging the company has misled investors and put customers at risk. President Donald Trump's administration is stepping up scrutiny of foreign investment in American technology.

Musk also tweeted late Monday night he was working with Goldman Sachs and private equity firm Silver Lake as financial advisers. The Journal cited an unidentified person familiar with the matter.

Tesla says it has formed a special committee of three independent directors to asses any proposal from Mr Musk.

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