The U.S. Department of Justice may be investigating Tesla and its CEO Elon Musk for criminal wrongdoing related to a series of tweets its founder sent this year, Bloomberg reported Tuesday.
A spokeswoman for the Justice Department declined to comment on the report.
At issue are a series of tweets in August in which Musk said that the automaker had “funding secured” for taking the company private. The initial tweet sent off a flurry of activity, and momentarily halted trading of Tesla’s stock, as regulators and investors scrambled to learn more.
Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk) August 7, 2018
Already, securities officials are investigating the veracity of the series of tweets. Late last month, after the company’s board of directors initially backed Musk’s claim that the automaker could purchase back shares from investors for $420 each, Tesla ditched its bid to go private. In a letter, Musk said that institutional investors couldn’t follow a private bid but doubled-down on the claim that Tesla had money for the move.
A criminal investigation and possible subsequent charges or a conviction could cloud Musk’s future with the automaker.
Regulations prohibit felons or “bad actors” from many executive functions of publicly traded companies. If Musk were charged and convicted for fraud, it could mean that he would have to step down, sell his stake, or worse.