Tesla Under Department Of Justice Investigation For Elon Musk 'Funding Secured' Tweet

More than a month after rumors first circulated that the Securities and Exchange Commission would investigate Tesla, Inc. (TSLA) for fraud or market manipulation, the Department of Justice on Tuesday has stepped in. The DOJ is investigating the electric car manufacturer for possible fraud in the aftermath of CEO Elon Musk’s failed take-private bid, according to Bloomberg sources.

The investigation reportedly centers on Musk’s now-infamous Aug. 7 tweet, in which he declared he had “funding secured” to make Tesla a private company. Shares of Tesla surged after the tweet and ended the trading day with an 11 percent gain. Trading for Tesla shares was actually halted for a portion of the afternoon.

However, the announcement opened up legal questions for Musk and the company. It was later learned that Musk was referring to discussions with the Saudi Arabian government’s public fund, though no actual deal was in place. Tesla later announced it had abandoned plans to go private.

Declaring that Tesla had secured funding for privatization when that was not actually the case may have constituted fraud. For Tesla’s part, the company said in a statement that the DOJ’s request for documents was voluntary, and the company had fully cooperated with the government agency.

"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," a company spokesperson said.

Shares of Tesla continue to trend downward in recent weeks. After reaching $387.46 on Aug. 8, the price of shares dipped to $252.25 on Sept. 7. Shares of Tesla were down 3.49 percent in late-afternoon trading Tuesday.

It could take months before the Justice Department reaches any kind of conclusion in the Tesla investigation. It is merely the latest development in what has been a tumultuous 2018 for the company. In September alone, two high-level executives have quit their jobs and Musk has been sued by a cave diver he repeatedly called a pedophile with no evidence to back his claim.