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The US Securities and Exchange Commission’s lawsuit seeks to bar Musk from serving as an officer or director of a public company, which would potentially remove him from his roles as chief executive officer and chairman of Tesla.

The background: The case turns on a series of tweets that Musk posted in August, claiming to have the “funding secured” to take the electric-car company private for $420 a share, a premium over the stock price at that time. From the first tweet to the end of trading that day, Tesla’s shares rose 6% on heavy volume.

The allegations: But the SEC’s filing on Thursday says the statements were “materially false and misleading,” noting that his earlier conversations with a sovereign investment fund didn’t establish deal terms and “nothing was exchanged in writing.”

What’s next? Bloomberg reported that SEC lawsuits often seek to bar a defendant from leadership roles. It’s unclear how likely that outcome is, but removing Tesla’s iconic cofounder, who’s indelibly intertwined with the brand, would raise very real questions about the company’s prospects. 

In a response sent to media outlets, Musk said: “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.”

The SEC suit—which also seeks unspecified civil penalties and doesn’t name Tesla as a party—adds to Musk’s growing legal challenges. Earlier this month, the US Justice Department reportedly opened a criminal probe into the same statements. He’s also being sued for “publishing false and heinous accusations of criminality” after calling a man involved in the Thailand cave rescue this summer a “pedo guy.”

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