SEC Serves Tesla with a Subpoena For This Reason

Elon Musk made quite the commotion when he tweeted earlier this month about taking his company Tesla private and how he has secured funding.

The SEC has reportedly served the electric vehicle maker with a subpoena after that tweet, which is one of the first steps in a formal inquiry. Shares of Tesla dropped on the news.

According to reports from earlier, the SEC had before intensified its scrutiny over Tesla after the tweet.

Musk had said that the Saudi Arabia sovereign wealth fund had express interest. He wrote in a blog post that he had been in discussions with the fund since early last year about a major investment that would help Tesla go private. According to sources, executives from PIF have also approached Tesla multiple times about investing in the company this year.

Fox Business Network’s Charles Gasparino tweeted, “SCOOP: SEC ramps up investigation into Tesla privatization plans; sends subpoenas to Tesla regarding privatization plans and Musk’s statements involving “funding secured”–sources Subpoenas signal investigation has reached the “formal” stages — sources more now @FoxBusiness.”

Disclaimer: We have no position in Tesla Inc. (NASDAQ: TSLA) and have not been compensated for this article.