NEW YORK — The Securities and Exchange Commission filed a lawsuit Thursday against Elon Musk, the chief executive of Tesla, accusing him of making false public statements with the potential to hurt investors.
The lawsuit, filed in federal court in New York, seeks to bar Musk from serving as an executive or director of publicly traded companies. Tesla, the electric-car maker of which Musk was a co-founder, is publicly traded.
The suit relates to an Aug. 7 Twitter post by Musk, in which he said he had “funding secured” to convert Tesla into a private company.
The SEC said Musk “knew or was reckless in not knowing” that his statements were false or misleading. “In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source,” the SEC said in its lawsuit.
In a statement distributed by Tesla, Musk said: “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.”
Musk, who sometimes sleeps on Tesla’s factory floor as he works to iron out production problems, is widely regarded by analysts and investors as the creative engine behind Tesla. The company’s shares tumbled more than 10 percent in after-hours trading following after the SEC filed its lawsuit.
The SEC already had been investigating Tesla when Musk posted his going-private tweet while he was driving himself to the airport in a Tesla Model S. The company’s shares immediately rocketed higher.
It soon emerged that Tesla’s board members were blindsided by Musk’s Twitter post. Tesla at the time hadn’t hired investment banks or others to help raise the money that would be needed to take the company private. And many Tesla investors — natural places for Musk to seek financing — said they hadn’t heard anything from Musk before his tweet.
The SEC soon issued a round of subpoenas to Tesla and the financial institutions it eventually hired for advice on a potential conversion into a private company. The agency also interviewed a number of Tesla board members, according to a person with knowledge of the matter.
The complaint said Musk “knew that he had never discussed a going-private transaction at $420 per share with any potential funding source.”
The SEC said Musk had been in a persistent feud with investors who were betting that Tesla shares would fall. The complaint notes that Musk had discussions in late July with a foreign investment fund that had recently acquired a 5 percent stake in Tesla. In those discussions, Musk said he was thinking about taking Tesla private, but regulators said nothing formal was agreed on.
The lawsuit is the latest in a series of escalating problems for Tesla and Musk. The company has been struggling to achieve the ambitious production targets that Musk had publicly outlined. He has made a series of unusual public comments or appearances, including an internet interview in which Musk appeared to smoke marijuana.
Federal prosecutors in California also have sought information from Tesla, an inquiry that appears to be at an early stage. The SEC complaint said that on Aug. 2, five days before he sent the tweet, Musk sent an e-mail to Tesla’s board, chief financial officer, and general counsel with the subject line: “Offer to Take Tesla Private at $420.” Musk said he wanted to put the matter up to a shareholder vote “at the earliest opportunity,” the complaint added, and wanted to do so in part because of the attacks on the company’s stock from bearish investors known as short-sellers.
According to the filing, Musk remarked that the $420 figure was based on a 20 percent premium to the stock’s Aug. 2 closing price — and rounded it up to $420 after his girlfriend told him of the number’s significance for marijuana smokers and thought it would be funny.
The board on Aug. 3 authorized Musk to start talking to some investors about the plan to go private and asked him to report back on those conversations, the complaint said. Musk had a conversation with at least one large investor, it added, but before anything was close to completion, he began posting statements on Twitter about taking the company private on Aug. 7.
The SEC said that in the ensuing days, Musk did nothing to clarify his statements and threw fuel on the fire with additional posts on Twitter.
The case against Musk is noteworthy not only for the speed with which the SEC brought it but because of the potential severity of relief regulators are seeking, which could strip him of the ability to continue to run the company he founded. It also would be one of the most severe actions taken by the SEC against a corporate executive for statements made on Twitter.
The agency adopted a policy a few years ago that permits corporate executives to make comments on Twitter and other social media. The enforcement action is sending a stern warning to corporate America about what should be said in those communications. The episode arose as Musk had made a personal priority of smoothing out the assembly of a crucial new product, the Model 3 roadster. In a bid to lift output to 5,000 vehicles a week, he stalked around the plant in Fremont, Calif., joining in to help solve bottlenecks and other problems. He supervised the construction of a massive tent outside the plant’s walls to house a third assembly line, a move auto-manufacturing experts said they had never seen before.
While Model 3 production has accelerated significantly this year, it is unclear how smoothly the process is running. Some owners have complained that cars arrived with crooked panels and other flaws. Hundreds of Model 3s have been parked in lots around California and other states, some needing repairs before they can be delivered.