It’s been reported by Bloomberg that the Securities Exchange Commission (SEC) has filed charges against Tesla’s CEO Elon Musk in a Manhattan federal court.

According to the SEC, Musk’s tweets about finding the funding for taking Tesla private weren’t true. This constitutes as “false and misleading statements” under fraud. Furthermore, they’re looking to ban him from serving as the officer of the public company.

Musk calculated the $420 price based on a 20% premium of the closing share price of that day. He believes that is the “‘standard premium’ in going-private transaction.”

“This calculation resulted in a price of $419, and Musk stated that he rounded the price up to $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend ‘would find it funny, which admittedly is not a great reason to pick a price.'”

Due to the lawsuit, Tesla stock prices had fallen by 7% in just one day, and are expected to fall further. This comes just after the Justice Department was reportedly looking into the same tweets as well, and Elon Musk’s defamation lawsuit of the Thai Cave rescue diver who he called ‘Pedo guy’.

It looks like he’s going to be in for a rough few months.

Elon Musk’s Statement

This unjustified action by the SEC leaves me deeply saddened and disappointed. I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way.

Join Statement From Tesla And The Board Of Directors

Tesla and the board of directors are fully confident in Elon, his integrity, and his leadership of the company, which has resulted in the most successful US auto company in over a century. Our focus remains on the continued ramp of Model 3 production and delivering for our customers, shareholders and employees.