SETH ROGEN OF TECH Elon Musk is being sued by the Securities Exchange Commission (SEC) over his infamous 'Tesla 420' tweet.
In a lawsuit filed on Thursday, the SEC said that Musk's tweet (below), which caused Tesla shares to climb 11 per cent, constitutes fraud for containing "false and misleading statements" as Musk "never discussed a going-private transaction at $420 per share with any potential funding source".
Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk) August 7, 2018
This "caused significant confusion and disruption in the market for Tesla's stock and resulting harm to investors", the watchdog added.
The SEC goes on to hilariously allege that Musk, who recently took a drag of a spliff during a Joe Rogan podcast, calculated the $420 price because he thought the weed reference would amuse his girlfriend Grimes.
"According to Musk, he calculated the $420 price per share based on a 20 per cent premium over that day's closing share price because he thought 20 per cent was a 'standard premium' in going-private transaction," the watchdog alleges.
"This calculation resulted in a price of $419, and Musk stated that he rounded the price up to $420 because he had recently learned about the number's significance in marijuana culture and thought his girlfriend would find it funny, which admittedly is not a great reason to pick a price.'"
Musk criticised the SEC's action in a statement, saying the lawsuit leaves him "deeply saddened and disappointed."
"I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way," he added.
In reaction to the SEC's lawsuit, Tesla saw more than 11 per cent shaved off the company's share price.
This isn't the only investigation that Musk is currently facing, as the Justice Department is reportedly looking into whether Musk misled investors with those tweets. The embattled CEO is also embroiled in a defamation suit with the Thai Cave rescue diver, who Musk called a "pedo guy" in August. µ
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