"These uncertainties notwithstanding, on Tuesday, August 7, 2018, Musk published a series of statements about a transaction to take Tesla private using his personal Twitter account. Musk did not consult with Tesla’s Board of Directors, any other Tesla employees, or any outside advisors about these tweets before publishing them," said the SEC complaint. 

The SEC pointed out that Nasdaq rules provide that announcements like this have to be announced to Nasdaq at least 10 minutes beforehand, which Musk did not; that caused share trades to be halted until 3:45 p.m. In the meanwhile, Musk continued to tweet, eventually saying that investor support is confirmed and that "financing is secured." The complaint said that even his own company staff were confused, but they assumed that there was something Musk knew that they didn't; the head of Investor Relations, on a call with an investment bank research analyst, said he didn't actually know the substance of the agreement but that "I would assume that given we went full-on public with this, the offer is as firm as it gets." The SEC said that it was not. 

Musk walked back some of his claims about a week later, on Aug. 13, when he clarified that his statement was based on the, once again, assumption that there was no question that the deal with the fund could be closed and that it was just a matter of moving the process along. He later said that the company was actually still mulling over whether to take the company private at all, contrary to an Aug. 7 tweet saying the only reason the move might not be certain was that it would be subject to shareholder vote. 

Musk finally reversed his earlier claims by saying, on Aug. 24, that Tesla would remain public. His original plan was for all investors to stay with Tesla when the company went private; the SEC said he later admitted that the assumption it would be possible for small shareholders to remain invested in the company was based on a "fundamental misunderstanding" 

The SEC said that Musk's statements were materially false and misleading, that he either knew or was reckless in not knowing that his statements were false and misleading, that he omitted material facts in his announcements, and that his tweets caused "market chaos" and "harmed Tesla investors."

“Corporate officers hold positions of trust in our markets and have important responsibilities to shareholders,” said Steven Peikin, Co-Director of the SEC’s Enforcement Division. “An officer’s celebrity status or reputation as a technological innovator does not give license to take those responsibilities lightly.”  

CNN Money said that the charges against Musk are serious, as he is being charged under Rule 10b-5 of the Exchange Act, which is generally used for inside traders and market manipulators. CNBC said that Tesla was very close to coming to a no-guilt settlement but that Musk, at the last minute, refused to sign the deal, saying he could not live with himself if he agreed to accept such a settlement. CNBC noted that, besides a token monetary settlement, the deal would have also barred Musk as chairman for two years and would have required Tesla to appoint two new independent directors. Musk, for his part, said the SEC's suit was completely unjustified and that he acted in the best interests of the investors.