Car manufacture Tesla is under investigation due to public statements made by the company CEO, Elon Musk. The investigation is in relation to Musk’s tweet last month about thinking to take Tesla private and had the funding secured for the deal to be completed.
The investigation is being handled by the U.S. attorney’s office in the Northern District of California. This follows a subpoena which was issued but the Securities and Exchange Commission requesting information from Tesla regarding Musk’s plans to go private. However, Musk has not proceeded with his plans to take the maker of electric cars private.
Due to the nature of this criminal inquiry and it being in its early stages, do not expect a quick outcome. These types of inquiries usually end with the prosecutors deciding against bringing any action from enforcement agencies.
Tesla was already being investigated by the SEC before Musk’s alleged tweet. The prior investigation was focused on if Tesla had provided false pronouncements on their manufacturing goals and sales targets. As a result, investigators could look for evidence about the company leaders willfully lying to their investors about the health of the business.
Musk came under fire for a tweet he had posted on August 7 about having the funds for a buyout even though that may not been valid to begin with. However, a week later, Musk stated the origin for his statement was conversations which he had with Saudi Arabia’s Public Investment Fund. It was this Public Investment Fund which originally expressed interest in assisting to take the company private in early 2017.
Tesla’s Board advised they had not received any proposal from Musk, who is also the company’s chairman. The board also did not divulge if going private would be feasible or not.