“Funding secured”: the $420 tweet

On 7 August 2018, Musk tweeted: “Am considering taking Tesla private at $420. Funding secured.” The SEC said he had not agreed on a price or confirmed terms with any funding source, and that the tweets were false and misleading. It charged him with securities fraud on 27 September. [1]

Two days later he settled. He and Tesla each paid a $20 million penalty, he stepped down as chairman for at least three years, Tesla added two independent directors, and the company agreed to review his communications. He neither admitted nor denied the allegations. The SEC’s distribution record shows the money went to investors. [1][2]

This was a civil case, not a criminal one. A settlement without admission is not a finding of fraud, though the penalty and the governance changes were real.

Tesla investors brought a class action, arguing the tweets moved the stock and cost them money. On 3 February 2023, a federal jury in San Francisco found Musk and Tesla not liable. [1][2][3]