The Securities and Exchange Commission is under mounting pressure to take action against Elon Musk as a result of the embattled CEO’s tweet earlier this month, where he stated he had “funding secured” for a bid to take Tesla private at $420 per share. Musk has so far been unable to back the tweet up with any type of tangible proof that he did, in fact, have funding “secured”.

After Musk’s tweet, the stock at one point briefly eclipsed $380 and since then has been volatile, swinging to as low as $282 per share in during this Tuesday’s pre-market session – a range of nearly $100 per share.

A person familiar with the regulatory investigation is under mounting pressure  as stating that the SEC believes they will be subjected to “a beating from politicians and in the media” if Elon Musk escapes this debacle without a sanction. Sanctions from the SEC can be monetary or remedial in nature – or both – ranging from simple fines to more serious actions like injunctive relief and officer and director bars. 

The revelation that the Securities and Exchange Commission is under pressure to act comes From a under mounting pressure  that also makes two additional revelations regarding the SEC’s investigation of Tesla.

  • The first is that, due to the recent pressure and the fact that there was already an ongoing SEC probe about Model 3 production and operational targets, there is the chance of that investigation being parsed out on its own, resulting in two SEC investigations.
  • The second is that the case appears to be a top priority at the SEC. It was reported that the SEC has limited the number of officials who are allowed to view the details of this case due to its sensitive and high profile nature. One SEC official went on record saying that “he couldn’t recall another matter generating as many calls from the media as the Tesla investigation.”

    • One of the reasons that the SEC is feeling increased pressure to act is because Democratic lawmakers have been critical of Jay Clayton‘s tenure as Chairman of the SEC, claiming that the agency has been too “lax” with enforcement actions. Ironically, it now appears that the alternative energy poster-child often touted by the left as the second coming could be the first to bear the brunt of a far less “lax” enforcement action.

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