Tesla Under Investigation by U.S. Department of Justice
Elon Musk’s infamous “funding secured” tweets from a few months ago caught the attention of Tesla fans, owners, investors -- and the Securities and Exchange Commission.
The Telsa CEO and the company are now under investigation by the U.S. Department of Justice for those claims.
The DoJ investigation deals with the U.S. attorney’s office in the Northern California district. The criminal probe goes along with the investigation conducted by the SEC. Federal prosecutors are investigating Musk’s tweets for fraud, as those tweets ultimately led to the company’s shares going higher.
There could also be further investigation into the circumstances of Tesla’s Chief Accounting Officer Dave Morton quickly resigning after less than a month on the job, according to reports.
Morton was a former CFO for Seagate Technology PLC, and he joined the company just one day before Musk issued the tweet to take the company private.
Bloomberg initially broke the story, and Tesla issued a statement in response to their questions.
“Last month, following Elon’s announcement that he was considering taking the company private, Tesla received a voluntary request for documents from the DOJ and has been cooperative in responding to it,” the company said in a statement released Tuesday following Bloomberg’s report of the investigation. “We have not received a subpoena, a request for testimony, or any other formal process. We respect the DOJ’s desire to get information about this and believe that the matter should be quickly resolved as they review the information they have received.”
Tesla was issued a subpoena regarding those tweets from the SEC, but few expected the case to go farther than the SEC’s investigation.
The issue with the SEC stems from the initial tweet. Musk later clarified that he was talking about conversations with Saudi Arabia’s Public Investment Fund. That group said they wanted to take the company private in early 2017. However, the Tesla board then clarified the company had not received any sort of formal proposal from Musk -- the company’s CEO and chairman.
Musk later said he abandoned the effort three weeks after his initial tweet.
“The whole format of his announcement was highly problematic and very unusual,” Harvey Pitt, a former SEC chairman who now leads advisory firm Kalorama Partners, said last month on Bloomberg Television. “You can’t tell a lie.”
Interesting Engineering will continue covering this story as it develops.