SEC Charges Telsa CEO Elon Musk With Fraud

The Securities and Exchange Commission has charged Tesla CEO Elon Musk with fraud. The complaint accuses Musk of making "false and misleading statements" when he tweeted that he was thinking of taking the electric car company private. 

The SEC complaint said that  Musk "had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source," before he sent out the tweet. 

"According to Musk, he calculated the $420 price per share based on a 20% premium over that day's closing share price because he thought 20% was a 'standard premium' in going-private transaction," the SEC alleged in its suit. "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.'"

The complaint asks the judge to bar Musk from running or serving on the board of a publicly-traded company. If the judge grants that request he would be forced to step down from his role at the Tesla.

Musk called the SEC complaint "unjustified" in a statement to CNBC.

"This unjustified action by the SEC leaves me 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."

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