SEC subpoenas, board surprised, investor lawsuits: Tesla woes mounting?

Elon Musk at Tesla Model 3 reveal

A reported subpoena from the Securities and Exchange Commission may add to the long list of growing worries for Tesla and its embattled CEO Elon Musk that now includes potential investor lawsuits, federal inquiries, and reports that the automaker’s board of directors may not have been fully briefed on plans to go private.

On Wednesday, Charles Gasparino from reported via Twitter that the SEC has formally requested information from Tesla regarding Musk’s tweet stating “funding secured” for a buyback to go private. This report comes a week after SEC investigators reportedly began looking into Musk’s actions.

A formal investigation from federal authorities follows reports that even some on Tesla’s board of directors were blindsided by the CEO’s outburst. reported on Monday that Musk’s tweets regarding taking Tesla private “had not been cleared ahead of time with the company’s board,” according to two people familiar with the board.

The report also casts doubts on Musk’s claim that a sovereign wealth fund in Saudi Arabia was prepared to help Tesla go private and says three sources familiar with the fund told the newspaper that it had not prepared requisite information for such a plan.

Multiple lawsuits have been filed by investors claiming Musk’s tweets manipulated Tesla’s stock price to ambush short sellers, according to . One lawsuit claims over a dozen banks and technology firms “weren’t aware of funding being locked in before Musk’s tweet.”

Musk released a statement Monday stating his “funding secured” statement was made after substantial talks with the Saudi fund about taking Tesla private July 31. The statement confirmed the Saudi fund now holds “almost 5 percent” of Tesla stock.

Read also:
FCA opening $30 million autonomous testing facility

Tesla is currently a public company and has been under pressure to meet production goals for its Model 3 electric car despite facing production challenges. Musk said he wanted to take the automaker private to focus on the automaker’s vision outside of quarterly earnings calls and to remove “perverse incentives for people to try to harm what we’re all trying to achieve.” Musk also has been a vocal critic of Tesla’s short sellers.

Regardless of whether Tesla does go private, it’s unlikely to do so before its third-quarter earnings call in November when Musk may face more questions about the lawsuits, funding to go private, Tesla production, and any SEC investigation.

Check Also

Nissan, Mitsubishi next-gen infotainment to be powered by Google’s Android

Google's Android operating system will be at the core of next-generation infotainment systems from Mitsubishi and Nissan arriving on the market in 2021. The Renault Nissan Mitsubishi Alliance announced Tuesday that future infotainment systems will feature the Android operating system to outfit its cars with a host of Google apps, which many users will...

Toyota Supra to be built alongside BMW Z4 at Austrian plant

Toyota confirmed Wednesday that its new Supra sports car will be built alongside the related BMW Z4 (shown below) at a plant in Graz, Austria. The plant is operated by independent vehicle manufacturer Magna Steyr and has produced the G-Class for Mercedes-Benz for several decades and more recently started producing the E-Pace and I-Pace for Jaguar. Soon it...