If you had any bit of common sense, you knew this was bound to happen: Tesla, Musk Face Criminal Probe Over Go-Private Statements.
>Federal prosecutors opened a fraud investigation after Musk tweeted last month that he was contemplating taking Tesla private and had “funding secured” for the deal, said the people, who were granted anonymity to discuss a confidential criminal probe. The tweet initially sent the company’s shares higher.
>The investigation by the U.S. attorney’s office in the Northern District of California follows a subpoena issued by the Securities and Exchange Commission seeking information from the maker of electric cars about Musk’s plans to go private, which he has since abandoned.
>The criminal inquiry is in its early stages, one of the people familiar with the matter said. Justice Department probes, like the civil inquiries undertaken by the SEC, can take months. They sometimes end with prosecutors deciding against bringing an enforcement action.
SEC Investigation
Musk is already under investigation by the SEC. That’s a civil investigation.
The DoJ investigation is criminal. The latter may require intent to commit fraud or at least purposely making misleading statements.
Yesterday, we learned Thai cave diver sues Elon Musk for defamation over ‘pedo guy’ tweet.
>The lawsuit is among several missteps made by Musk over the last several months. In early August, he revealed on Twitter he had funding secure to take Tesla private at $420 a share. After a flurry of questions about how solid that offer really was, and whether his tweet violated U.S. securities rules, he later switched gears to announce the company would remain public.
>Three months earlier, he ripped analysts during a Tesla quarterly earnings call for asking “boring” questions.
>Earlier this month, Musk generated controversy following an appearance on a podcast where he appeared to smoke marijuana.
Musk is clearly unstable, to say the least.
Disclosure, I am short via a set of PUT options.
Mike “Mish” Shedlock
If Tesla’s Board of Directors had terminated Musk after his comment about the scuba diver, Musk and the BoD would have been better off. Instead Musk shot a hole in the ship and the BoD’s response is basically, “You missed a spot”.
The Dept of Justice is obviously working for the shorts.
did I miss Musk’s tweet about how totally AWESOME the DOJ is?
Should be an open and shut case. Wonder if he’ll do time like Martha Stewart.
Very likely. The DOJ largely ignores securities fraud cases so when they do show interest in one they are looking to make an example out of somebody.
The bigger question is why hasn’t Musk stepped down and why hasn’t his Board demanded it?
Musk hasn’t stepped down. the board won’t put him off.
No Musk – No Tesla
One should never fly too close to the sun…
Musk’s problem is that he has started to believe his own hype and this has led to stupid decisions.
He’s a stable genius, and like the other stable genius we know is going to end up behind bars.