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Tesla shares plummet on fraud accusation

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The value of shares in the electric car group Tesla fell by more than 10% today, after the Securities and Exchange Commission (SEC) announced that it had filed a lawsuit accusing chief executive Elon Musk of fraud.

The SEC said that Musk had made ‘false and misleading’ claims to have secured funding with which to take the company private. Musk tweeted last month that he had “funding secured” to take the company private valued at $420 a share.

The value of Tesla shares soared following the tweets sent on 7th August, before falling back again as Musk distanced himself from his messages, citing investor feedback.

The US regulator wants to ban Musk from acting as an officer or director of a publicly traded company. It is also seeking a financial settlement, accusing Musk of causing ‘significant confusion’ in the stock market and confusing investors.

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