Tesla facing Justice Department investigation over Elon Musk tweets
WASHINGTON — The Department of Justice is investigating Tesla over statements its chief Elon Musk made last month about taking the company private, Tesla said Tuesday.
Justice investigators requested documents from the company last month related to Musk’s announcement, Tesla spokesman Dave Arnold said, and the company has complied.
Tesla had not “received a subpoena, a request for testimony, or any other formal process,” Arnold said. “We respect the DOJ’s desire to get information about this and believe that the matter should be quickly resolved as they review the information they have received.”
It’s unclear how advanced the investigation is, and there’s no guarantee the probe will lead to any criminal charges or other enforcement action.
A Justice Department spokeswoman said the agency “generally does not confirm, deny or otherwise comment on the existence or non-existence of an investigation.”
The electric automaker and its billionaire chief are also facing a Securities and Exchange Commission investigation and multiple shareholder lawsuits over the announcement from Musk, who tweeted that he had “funding secured” to complete the deal.
The surprise announcement on Aug. 7 sent Tesla’s stock price soaring by nearly 11 percent, cementing its place as one of America’s most valuable car companies. But 17 days later, amid growing skepticism from shareholders and analysts, Musk announced the proposal was dead.
Tesla investors are arguing in several pending lawsuits that the move, in which Musk pledged to buy back outstanding shares from investors at an elevated price, amounted to market manipulation or fraud.
Tesla’s stock dropped more than 4 percent Tuesday following the news, which Bloomberg first reported. Its stock is now trading 25 percent lower than it was on the day of Musk’s take-private tweet, an indication of faltering confidence in Musk’s leadership.
The DOJ probe could ramp up pressure for the company’s board to install new leadership or rein in the chaos surrounding Musk, an eccentric billionaire with business interests in space travel, artificial intelligence and underground supertrains.
News of the investigation comes one day after Musk was personally sued for defamation by Vernon Unsworth, a cave explorer influential to the rescue of boys from a Thai cave this summer. Musk accused Unsworth of being a pedophile after the British explorer criticized a mini-submarine Musk said could be used for the rescue.
The company is also facing whistleblower complaints from former employees, including Martin Tripp, who alleged that Musk had lied to investors about the company’s production.