Tesla CEO Elon Musk have been sued by the Securities and Exchange Commission for fraud, according to court documents filed Thursday.
Shares of the automaker fell roughly 7 percent in extended trading Thursday.
In August, Musk tweeted that he was considering taking Tesla private, adding "funding secured." The tweet spurred a scandal-ridden fall for Tesla.
@elonmusk: Am considering taking Tesla private at $420. Funding secured.
Musk later explained he had been in discussions with the Saudi Arabian sovereign wealth fund and felt confident the funding would come through at his proposed price of $420 per share. Musk said in an interview with The New York Times that he calculated that take-private price by rounding $1 up from what would have been a 20 percent upside at the time.
"According to Musk, he calculated the $420 price per share based on a 20% premium over that day's closing share price because he thought 20% was a 'standard premium' in going-private transaction," the SEC alleged in its suit. "This calculation resulted in a price of $419, and Musk stated that he rounded the price up to $420 because he had recently learned about the number's significance in marijuana culture and thought his girlfriend 'would find it funny, which admittedly is not a great reason to pick a price.'"
Read the lawsuit as filed in the Manhattan District Court below, and download the file here:
—CNBC's David Faber contributed to this report.
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