The U.S. Securities and Exchange Commission is suing Tesla CEO Elon Musk for misleading Tesla investors — a lawsuit that escalates the never-ending drama that has surrounded Musk in 2018, a year full of Tesla production holdups, unsubstantiated attacks and now serious legal trouble.
The lawsuit focuses on a tweet Musk sent in August about wanting to take Tesla private at $420 a share. He did not file any kind of formal SEC documents alongside the tweet, but his claim still sent Tesla’s stock soaring, and the stock halted trading shortly thereafter.
The SEC now says that Musk violated multiple SEC rules and called the tweeted statement, in which Musk claimed he had “funding secured” to take Tesla private, “false and misleading.”
The lawsuit seeks to block Musk from serving as an officer or board member for any public company.
“In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source,” the SEC’s lawsuit reads.
Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk) August 7, 2018
The lawsuit throws into doubt Musk’s tenure as the CEO of the $50 billion company that has made him into a hero entrepreneur. The SEC is attempting to forbid Musk, who is also the CEO of the private company SpaceX, from serving on any public company’s board.
Tesla shares fell sharply Thursday by more than 10 percent in after-hours trading, to around $273.
Musk was defiant in a statement.
“This unjustified action by the SEC leaves me deeply saddened and disappointed,” he said. I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way.”
Musk later claimed that he believed he had a confirmed a funding source from the Saudi Arabian government. (He reportedly sent the tweet while driving to the airport.) Long frustrated by short-sellers who make money on Tesla’s stumbles, Musk ultimately decided that the ambitious take-private plan was not feasible.
Musk has become a larger-than-life, mainstream celebrity of sorts over the past few years, starting companies seemingly on a whim, including “The Boring Company” that digs tunnels and sold flamethrowers to fans.
This article originally appeared on Recode.net.