WASHINGTON — The Justice Department is investigating Tesla over statements chief executive Elon Musk made last month about taking the company private, Tesla said Tuesday.
Department investigators requested documents from the company last month related to Musk’s announcement and the company has complied, Tesla spokesman Dave Arnold said.
Tesla had not “received a subpoena, a request for testimony, or any other formal process,” Arnold said. “We respect the DOJ’s desire to get information about this and believe that the matter should be quickly resolved as they review the information they have received.”
It is unclear how advanced the investigation is, and there’s no guarantee the probe will lead to any criminal charges or other enforcement action. But a person familiar with the investigation said it is a fraud probe seeking to determine whether Musk’s statements were meant to mislead investors.
Justice Department spokeswoman Nicole Navas said the agency “generally does not confirm, deny or otherwise comment on the existence or nonexistence of an investigation.”
The electric-car maker and its billionaire chief are also facing a Securities and Exchange Commission investigation and multiple shareholder lawsuits over the announcement from Musk, who tweeted on Aug. 7 that he had “funding secured” to complete the deal to take the company private.
The surprise announcement on Aug. 7 sent Tesla’s stock price soaring by nearly 11 percent, cementing its place as one of the most valuable U.S. car companies. But 17 days later, amid growing skepticism from shareholders and analysts, Musk announced the proposal was dead.
Tesla investors are arguing in several pending lawsuits that the move, in which Musk pledged to buy back outstanding shares from investors at an elevated price, amounted to market manipulation or fraud.
Tesla’s stock dropped more than 4 percent Tuesday after the news, which Bloomberg first reported. Its stock is now trading 25 percent lower than it was on the day of Musk’s tweet.
The Justice Department probe could ramp up pressure for the company’s board to install new leadership or rein in the chaos surrounding Musk, an eccentric billionaire with business interests in space travel, artificial intelligence and underground super-trains.
News of the investigation comes one day after Vernon Unsworth, a cave explorer influential to the rescue of boys from a Thailand cave this summer, sued Musk, alleging defamation. Musk accused Unsworth of being a pedophile after the British explorer criticized a mini-submarine Musk said could be used for the rescue.
The company is also facing whistleblower complaints from former employees, including Martin Tripp, who alleged that Musk lied to investors about the company’s production.
Send questions/comments to the editors.
