Federal regulators have subpoenaed Tesla Inc., according to a person familiar with the matter, ramping up an investigation into whether Chief Executive Elon Musk was truthful when he tweeted last week that he had secured funding to take the electric-car maker private.
The subpoena from the Securities and Exchange Commission seeks information from each of Tesla’s directors, the person said. It is unclear what information is being sought. Representatives for the SEC and Tesla TSLA, -2.57% declined to comment.
The Wall Street Journal previously reported that the SEC has made preliminary inquires about Musk’s basis for writing on Twitter last week that he had “funding secured” to take Tesla private. The SEC inquiry could become a formal investigation if officials believe a violation of law occurred and that Musk’s conduct caused investor losses, the Journal reported. Fox Business Network earlier reported that Tesla received a subpoena from the SEC.
Musk surprised investors on Aug. 7 when he tweeted that he was considering taking the electric-car maker private at $420 a share, or $72 billion, about 20% above the stock’s trading price earlier that day. In his tweet, Musk said the buyout had “funding secured,” without providing any details. In a blog post on Tesla’s website Monday, he clarified that discussions with Saudi Arabia’s sovereign-wealth fund about funding the deal were the basis for his assertion and said the fund hadn’t signed off on a deal.
The subpoenas indicate senior SEC officials have authorized a formal investigation of the company, a step up from the initial inquiries the regulator made to Tesla. The SEC opens formal investigations when it thinks a violation of law has occurred and that a probe is justified given the nature of the suspected misconduct and the potential harm to investors.
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