Tesla shares fall after Musk trolls US securities watchdog

Emily Nicolle
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Musk labelled the SEC as enabling shortsellers of Tesla (Source: Getty)

Tesla billionaire Elon Musk appeared to mock the US Securities and Exchange Commission (SEC) on Twitter late last night, less than four hours after a federal judge demanded an explanation of the settlement deal reached between the two sides.

"Just want to [sic] that the Shortseller Enrichment Commission is doing incredible work," wrote Musk, who has frequently blasted investors who bet against the company's share price rising. "And the name change is so on point!"

Shares in Tesla fell more than five per cent in the first hours of trading this afternoon, having already closed 4.4 per cent down yesterday evening.

Musk secured a settlement with the SEC last week after it pressed charges against him of securities fraud, which alleged he had misled investors by saying he had secured funding for a buyout of the public carmaker.

The infamous 7 August tweet detailed plans to take Tesla private at $420 per share, a number which Musk settled on after rounding up the current share price from a 20 per cent premium due to its significance in marijuana culture.

The SEC deal requested Musk step down as chairman of Tesla, though he could remain as its chief executive, and pay a $20m (£15.3m) fine. Tesla also had to pay a $20m fine, despite not accepting charges.

Read more: Musk to step down as Tesla chairman in deal with US regulators

Additionally, Tesla's board must implement procedures for monitoring Musk's communications with investors, including on Twitter.

US district judge Alison Nathan had earlier in the day requested Musk and the SEC send an explanation of the deal in a joint letter by 11 October, justifying why it was fair and in the public interest.

Experts spoken to by Reuters suggested there was no "serious chance" for Musk's settlement to be rejected by Nathan, with one adding: "This is just a hoop to be jumped through."

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