Tesla shares dropped 12 percent Friday morning after the Securities and Exchange Commission (SEC) charged CEO Elon Musk with fraud and pushed to have him removed from the company.
The lawsuit filed Thursday afternoon in federal court in Manhattan, alleged that Musk misled shareholders in a series of unusual tweets in August, in which he said he had secured funding to take the electric car company private.
Musk responded by saying the charges were “unjustified.”
The company was not named in the lawsuit, but if the SEC succeeds in court Musk could be removed from Tesla and barred from ever serving as an officer of a public company.
“Am considering taking Tesla private at $420. Funding secured,” Musk said in the August tweet.