Elon Musk blew up a Tesla settlement with the SEC last week

Tesla CEO Elon
Musk.
Patrick Fallon /
Reuters

• Elon Musk had a settlement agreed with the Securities
  and Exchange Commission (SEC) but blew it up at the eleventh
  hour, The Wall Street Journal reports.
• The SEC is suing Musk and seeking to bar him from being
  an officer or director at any public company.
• The suit revolves around Musk’s now infamous “funding
  secured” tweet in August when he toyed with the idea of taking
  Tesla private.

Elon Musk agreed on a settlement with the Securities and Exchange
Commission (SEC), but walked away from the deal at the eleventh
hour last week.

That’s according to a report in The Wall Street Journal, which
said the SEC was on the brink of filing the settlement, only for
Musk to blow it up at the last minute.

That chain of events led to the SEC announcing on Thursday that
it was suing Musk on charges he made “false and misleading
statements” in tweets claiming he could take the company private.

The Journal said the SEC had “crafted” the settlement with Musk.
It was preparing to file the agreement on Thursday last week, but
then Musk’s lawyers called to spike the deal. The SEC then
hastily pulled together a lawsuit.

The SEC is suing the Tesla CEO for his now infamous “funding
secured” tweet from August 7, which purported he was taking Tesla
private at $420 a share. The SEC said Musk knew such a deal was
never on the table. He announced on August 25 that
Tesla would remain public.

In its claims for relief, the SEC recommended that Musk pay a
penalty and that he be “prohibited from acting as an officer or
director” of a public company.

Musk said he was “deeply saddened” by the lawsuit. In a
statement, the Tesla CEO said: “The unjustified action from the
SEC leaves me deeply saddened and disappointed. I have always
taken action in the best interest of the truth, transparency and
investors. Integrity is the most important value in my life and
the facts show I have never compromised this in any way.”

Business Insider contacted the SEC for comment. A Tesla
spokeswoman said: “Tesla and the board of directors are fully
confident in Elon, his integrity, and his leadership of the
company, which has resulted in the most successful US auto
company in over a century. Our focus remains on the continued
ramp of Model 3 production and delivering for our customers,
shareholders and employees.”

The SEC lawsuit caused
Tesla’s stock to dip by as much as 11% in after-hours
trading.

Get the latest Tesla stock price here.