Musk tweeted last month that he considered taking Tesla privately and had "secured funding" for the deal.
UPDATED: 18.18.2016 16:16 ET – adds shares close by
WASHINGTON / NEW YORK – Tesla Inc. is being investigated by the Ministry of Justice on public statements from the company and CEO Elon Musk, two people who were familiar with the case told Bloomberg. The criminal probe runs alongside a previously reported civil investigation by securities regulators.
Federal prosecutors opened a fraud investigation after Musk had borrowed last month that he was considering taking Tesla privately and had "secured funding" for the deal, said the people, who were declared anonymous to discuss a confidential criminal probe. The tweet initially sent the shares of the company higher.
Tesla has confirmed that it has been contacted by the Ministry of Justice.
"Last month, after Elon & # 39; s announcement that he was considering taking the company privately, Tesla received a voluntary request for DOJ documents and contributed to the response," the company said in a statement that Tuesday after Bloomberg's report on the research was released. "We have not received a summons, a request for a testimony or other formal process, we respect DOJ's wish to receive information about it and believe that the matter should be resolved quickly if they receive the information they have received. judge. "
The investigation by the law firm of the United States in the northern district of California follows a summons from the Securities and Exchange Commission, which gathers information from the maker of the electric car about Musk's plans to go private, which he has since gave up.
The criminal investigation is still in its infancy, said one of the people who were familiar with the issue. Probes from the Ministry of Justice, such as the civil investigations being conducted by the SEC, may take months. They sometimes end up with prosecutors who decide not to file an indictment.
Abraham Simmons, a spokesman for the United States law firm in San Francisco, declined to comment.
SEC probe
SEC enforcement attorneys at the San Francisco office were already investigating Tesla before Musk sent his tweet about private taking the company, reported Bloomberg on Aug. 9. The existing probe focuses on whether Tesla had made misleading statements about production goals and sales targets. , according to the two people are familiar with the issue.
It is unclear whether the criminal investigation is so broad. Public prosecutors in securities fraud investigations can gather evidence on matters such as whether business leaders deliberately lied to investors about the health of the company.
Musk exposed himself to legal risk by tweeting on 7 August that he had the financing for a buy-out, although that might not be the case. Almost a week later Musk said that the basis for his explanation lay in conversations with the Public Investment Fund of Saudi Arabia, who showed the first interest to help the company get the company private in early 2017.
Abandoned effort
The board of Tesla then said that it had not received a formal proposal from Musk, who was also the chairman of the company, and had not concluded whether private was advisable or feasible. Musk left the effort less than three weeks after his first tweets.
Now that Musk's tweeting has drawn the attention of the Ministry of Justice, researchers were able to extend their opinion to other public statements from the CEO about the health of the company, according to one of the people familiar with the issue. Authorities can also look at the circumstances surrounding the dismissal of Tesla's Chief Accounting Officer, Dave Morton, after less than a month at work, the person said.
Morton, former chief financial officer of Seagate Technology Plc, a computer manufacturer at the computer, came a day before Tekla tweeted that he was considering buying out some investors for $ 420 per share and taking the company privately.
Tesla's share fell by 3.3 percent and closed at $ 284.96 in New York.