Tesla may be under criminal investigation by the U.S. Department of Justice
The punches just keep on rolling in for Elon Musk.
According to two people familiar with the company, Tesla Inc. is under investigation by the U.S. Department of Justice. The investigation, which allegedly coincides with an SEC probe started last month, is due to possible fraud. In August, Tesla CEO Elon Musk tweeted that he was considering taking the company private and had secured funding to do so. Soon after that tweet, the SEC (Securities and Exchange Commission) subpoenaed the company for information relating to these plans. Musk has since backpedaled on this statement.
While the reality of a criminal investigation by the DOJ is yet to be confirmed, a spokesperson for Tesla did state that the company was contacted by the department last month. In a statement to Bloomberg, the spokesperson said:
“Last month, following Elon’s announcement that he was considering taking the company private, Tesla received a voluntary request for documents from the DOJ and has been cooperative in responding to it. We have not received a subpoena, a request for testimony, or any other formal process. 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.”
Even though a criminal investigation hasn’t been fully confirmed by any involved party, the markets reacted poorly to these rumors. Tesla shares dropped to 7.9% today after news broke about the possible investigation. At the time of this writing, shares have rebounded a bit, resulting in a 3.6% net loss for the day. Tesla shares are down 8% year-to-date.
This news comes a day after a libel lawsuit was filed against Musk personally by Vernon Unsworth, the British cave diver that Musk publicly insulted. Musk called Unsworth, who was involved in the rescue of the Thai soccer team that was trapped in a cave earlier this year, of being a pedophile via Twitter in July.