The Securities and Exchange Commission accused Tesla Inc. CEO Elon Musk of securities fraud on Thursday, Sept. 27, in a civil lawsuit charging him with lying or recklessly misleading when he tweeted that he had “funding secured” to take the electric car company private. After the tweet, Tesla shares jumped 6.4% to $379.57. After trading hours Thursday, when the complaint was filed, shares of Tesla plunged 11.8% to $271.52.
Alma Angotti, managing director and co-lead of the global investigations and compliance practice at Navigant Consulting, Inc., is a former SEC enforcement and shared her insights on the topic.
"That’s a pretty simple case to try to make if they can prove that he knowingly or recklessly provided false information to the market and it had a material impact. If he can show that he had a reason, that there was a basis for the private buyout and that he wasn’t providing false and misleading information to the market, then he wins."