Tesla Inc. is under investigation by the Justice Department over public statements made by the company and Chief Executive Officer Elon Musk, according to two people familiar with the matter. The criminal probe is running alongside a previously reported civil inquiry by securities regulators.
Federal prosecutors opened a fraud investigation after Musk tweeted last month that he was contemplating taking Tesla private and had “funding secured” for the deal, said the people, who were granted anonymity to discuss a confidential criminal probe. The tweet initially sent the company’s shares higher.
Tesla confirmed it has been contacted by the Justice Department.
“Last month, following Elon’s announcement that he was considering taking the company private, Tesla received a voluntary request for documents from the DOJ and has been cooperative in responding to it,” the company said in a statement released Tuesday following Bloomberg’s report of the investigation.
“We have not received a subpoena, a request for testimony, or any other formal process. We respect the DOJ’s desire to get information about this and believe that the matter should be quickly resolved as they review the information they have received,” it explained.
The investigation by the U.S. attorney’s office in the Northern District of California follows a subpoena issued by the Securities and Exchange Commission seeking information from the electric-car maker about Musk’s plans to go private, which he has since abandoned.
The criminal inquiry is in its early stages, one of the people familiar with the matter said. Justice Department probes, like the civil inquiries undertaken by the SEC, can take months. They sometimes end with prosecutors deciding against bringing any charges.
Tesla shares reversed gains and dropped as much as 4.4 percent to $282. The stock dropped 2.5 percent to $287.60 as of 11:45 a.m. in New York and are down about 7.7 percent this year.
Abraham Simmons, a spokesman for the U.S. attorney’s office in San Francisco, declined to comment.