Tesla under Justice Department investigation, report says

Joe Skipper  Reuters               Elon Musk

Joe Skipper Reuters Elon Musk

Tesla Inc (TSLA.O) said on Tuesday it received a request for documents from the U.S. Department of Justice over Chief Executive Elon Musk's public statements in August about taking the electric carmaker private.

Two days after the August 28 tweet, Musk emailed a BuzzFeed News reporter, suggesting that the reporter investigate Unsworth and "stop defending child rapists" according to the lawsuit, which is 65 pages long with exhibits. The announcement raised the stock price 11% in one day, but it has since fallen.

Tesla has not had an easy time lately, it was recently reported that Saudi Arabia's sovereign wealth fund - the organization from which Musk expected to get funding to take Tesla private - has just invested $1 billion in Tesla competitor Lucid.

Tesla CEO Elon Musk's tweet from more than a month ago keeps biting him in the. well you know. Shares of Tesla (TSLA) quickly tumbled 6% before recovering somewhat.

Short-sellers, who bet against the stock appreciating, complained that Musk's announcement was done to manipulate the stock price and cost them money. Tesla said it had not been subpoenaed.

Sakchai Lalit  AP               Vernon Unsworth with his partner Woranan Ratrawiphukkun
Sakchai Lalit AP Vernon Unsworth with his partner Woranan Ratrawiphukkun

The involvement of the Justice Department would be significant because the Securities and Exchange Commission-which has been investigating the case for several weeks-only has the power to bring civil charges.

Musk tweeted to his 22.5 million followers that Unswroth was a "pedo" after Unsworth criticized Musk in a July 13 television interview with CNN about the rescue. According to Bloomberg, the "criminal probe" is in its early stages in the US attorney's office in the Northern District of California. "Musk's influence and wealth can not convert his lies into truth or protect him from accountability for his wrongdoing in a court of law". Since then, Tesla has focused itself on its original Q3 2018 targets - that is, the continued production ramp of the Model 3 and the company's aim to become profitable.

Why this matters: Unlike the SEC, the DOJ has criminal authority.

Musk's maverick image is another factor behind Tesla's fortunes, for good and for ill: His outspokenness, technical acumen and geeky charm have attracted legions of dedicated fans and customers.

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