September 18, 2018 2:45 pm
Updated: September 18, 2018 2:46 pm

Tesla reportedly investigated by U.S. Justice Dept. after Elon Musk comments about privatization

WATCH: Is it time for Elon Musk to step away from Tesla?

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DETROIT – Tesla Inc. has turned over documents to the U.S. Justice Department after statements by CEO Elon Musk about taking the company private, the electric car maker confirmed Tuesday.

The Palo Alto, California, company co-operated with the request and believes the matter should be resolved quickly once federal prosecutors review information they have received, according to a company statement.

READ MORE: Minnesota man allegedly steals Tesla Model 3 vehicle with smartphone app

News of a potential criminal investigation pushed Tesla stock down 5 per cent in morning trading Tuesday, but the decline subsided a bit by early afternoon to 3 per cent, at $286.67.

“We have not received a subpoena, a request for testimony, or any other formal process,” Tesla’s statement said.

Bloomberg News reported Tuesday morning that the Justice Department is running a criminal probe parallel to an investigation by the Securities and Exchange Commission. The news service cited two people familiar with the matter that it did not identify.

The Justice Department generally does not confirm or deny investigations, spokeswoman Nicole Navas Oxman in Washington said.

Tesla said it was contacted by prosecutors after CEO Elon Musk tweeted last month that funding was secured to take the company private. The announcement raised the stock price 11 per cent in one day, but it has since fallen.

READ MORE: Elon Musk abandons bid to take Tesla private

Later the company admitted that funding wasn’t lined up and eventually Musk abandoned the idea.

Short-sellers, who bet against the stock appreciating, complained that Musk’s announcement was done to manipulate the stock price and cost them money.

© 2018 The Canadian Press

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