Tesla stock price: Elon Musk sued by the SEC

Business Insider/Samantha Lee

• Tesla shares are down 13% ahead of Friday’s opening bell after the Securities and Exchange Commission sued CEO Elon Musk.
• The SEC alleges Musk made “false and misleading statements” about his claims he could take the electric-car maker private at $420 a share. 
• The SEC also alleged Musk’s tweets caused market chaos and investor harm.
• The SEC recommends Musk pay a penalty and seeks to bar him from being the head of a public company. 
• Watch Tesla trade in real time here.

Tesla shares are getting slammed Friday morning, down more than 13%, after the US Securities and Exchange Commission sued CEO Elon Musk, alleging he made “false and misleading statements” in tweets on August 7 claiming he could take the electric-car maker private at $420 a share.

“Musk knew or was reckless in not knowing that each of these statements was false and/or misleading because he did not have an adequate basis in fact for his assertions” the complaint said.

“When he made these statements, Musk knew that he had never discussed a going-private transaction at $420 per share with any potential funding source, had done nothing to investigate whether it would be possible for all current investors to remain with Tesla as a private company via a ‘special purpose fund,’ and had not confirmed support of Tesla’s investors for a potential going-private transaction.”

In its lawsuit, the SEC alleges Musk’s tweets caused market chaos and investor harm and that the Tesla CEO had been vocal about his disdain for short sellers — or people betting shares would fall. 

The SEC recommends Musk pay a penalty and seeks to bar him from being an officer or director at a public company. 

Friday’s selling has Tesla’s stock on track to open near $270 a share, its lowest level since September 7. Should the sell-off intensify and shares were to close below $252.48, they would finish at levels last seen since in March 2017.

Tesla shares were down down less than 1% this year through Thursday. 

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Get the latest Tesla stock price here.