Tesla says it has turned over documents to feds

SHARE Tesla says it has turned over documents to feds
elon_musk_tesla_feds_e1537304361242.jpg

Tesla CEO and SpaceX founder and chief executive Elon Musk. Tesla Inc. has turned over documents to the U.S. Justice Department after statements by Musk about taking the company private, the electric car maker confirmed on Sept. 18, 2018. | AP file photo

DETROIT — Tesla Inc. has turned over documents to the U.S. Justice Department after statements by CEO Elon Musk about taking the company private, the electric car maker confirmed Tuesday.

The Palo Alto, California, company cooperated with the request and believes the matter should be resolved quickly once federal prosecutors review information they have received, according to a company statement.

News of a potential criminal investigation pushed Tesla stock down 5 percent in morning trading Tuesday, but the decline subsided a bit by early afternoon to 3.4 percent, at $284.89.

“We have not received a subpoena, a request for testimony, or any other formal process,” Tesla’s statement said.

Bloomberg News reported Tuesday morning that the Justice Department is running a criminal probe parallel to an investigation by the Securities and Exchange Commission. The news service cited two people familiar with the matter that it did not identify.

The Justice Department generally does not confirm or deny investigations, spokeswoman Nicole Navas Oxman in Washington said. The U.S. Attorney’s Office in San Francisco took the same stance.

Tesla said it was contacted by prosecutors after Musk tweeted last month while driving to the airport that funding was secured to take the company private. The announcement raised the stock price 11 percent in one day, but it has since fallen.

Later the company admitted that funding wasn’t lined up and eventually Musk abandoned the idea.

Short-sellers, who bet against the stock appreciating, complained that Musk’s announcement was done to manipulate the stock price and cost them money.

Stephen Crimmins, a former deputy chief of litigation for the SEC, said prosecutors probably are looking at Musk’s tweets to be cautious. “It automatically becomes so high profile that the government enforcers have to be particularly conscientious in taking a look at things,” he said.

Crimmins said Musk “speaks loosely,” but his conduct probably doesn’t rise to the criminal level. Prosecutors would have to prove Musk lied in order to move the stock price, which would be difficult, Crimmins said. Any loss to short-sellers would be for a short period and wouldn’t be worth the risk of Musk intentionally manipulating the stock price, Crimmins said.

The SEC likely would pursue a civil remedy that would include a provision that someone at Tesla review Musk’s tweets on corporate matters before they are sent out, he said.

The Latest
Venice is the first city in the world putting such a system in place.
The officer was shot as he and a partner were getting out of an elevator in a housing complex in the 1300 block of West Taylor Street Friday morning.
In light of employers moving in and out of Chicago, Harry Kraemer Jr. weighs in on what’s important to corporate leaders and how the city’s boosters can appeal to them.
The Bulls and LaVine did have a formal meeting on Thursday — the first day teams could negotiate with free agents — and the guard also met with several other suitors.
He grew up on the South Side, won renown after switching from rock music and also performed with Sting, Paul Simon and Ricky Skaggs.