Tesla, the multinational corporation known for its electric vehicle, was recently served with a subpoena by the Securities and Exchange Commission. The subpoena was served following the highly controversial tweet of Tesla CEO Elon Musk stating that he is considering to take the company private, adding that he had all the necessary funding ready.
Reports claim that the SEC had increased its inquiry of the electric car manufacturer following Musk's controversial tweet. A subpoena was subsequently issued. A move that was considered by many experts to be the first step in establishing a formal inquiry regarding the issue.
Following Musk's tweet and the subsequent issuance of a subpoena, Tesla saw its shares take a dive. After the market closed, Tesla's shares were down 3 percent.
Both Tesla and the SEC have declined to comment about the recent development.
The coverage of the SEC's inquiry is still unclear. However, it is important to note that the SEC had been inquiring about certain issues about Tesla prior to Musk's controversial tweet.
Musk flaunted the possibility of taking his company private in a private tweet, a move that sent the shares of Tesla tumbling down and the company's leadership in shambles.
What caught the attention of the SEC is Musk's claim that he had the "funding secured" should he take Tesla private. Experts believe that Musk may have violated an SEC rule that specifically states public statements made by company executives to be true.
Following the backlash, Musk explained that the Saudi Arabia sovereign wealth fund had shown significant interest in taking the electric car company private. A report by the New York Times claims that Tesla hired the services of Goldman Sachs to help the latter should it decide to turn private.
A week before Musk's tweet, a former Tesla employee filed a company against the company. The employee, Martin Tripp, worked as an engineer at Tesla's battery plant located in Nevada. Tripp claims that he had seen various problems regarding some of the batteries used in Tesla's cars. He is accusing Tesla of misleading company investors into thinking about some car production figures.
In a retaliatory move, Tesla sued Tripp claiming that the latter had tried to steal trade secrets. Tripp replied to the allegation claiming that Musk wrongly perceived him as a saboteur.
Musk and Tripp have been in a word war for quite something. The issue between the two had since receded into the background following Musk's controversial tweet of his intention to take Tesla private.
