Washington: The US Securities and Exchange Commission (SEC) has sent subpoenas to Tesla Inc. regarding chief executive Elon Musk’s plans to take the company private and his statement that funding was “secured", Fox Business Network reported on Wednesday, citing people familiar with the matter.

Subpoenas typically indicate the SEC has opened a formal investigation into a matter. Musk stunned investors and sent Tesla’s shares soaring 11% when he tweeted early last week that he was considering taking Tesla private at $420 per share and that he had secured funding for the potential deal. Tesla’s shares were last down 1.9% at $341.00 on Wednesday. They have erased all their gains following Musk’s tweet.

Musk provided no details of his funding until Monday, when he said in a blog on Tesla’s website that he was in discussions with Saudi Arabia’s sovereign wealth fund and other potential backers but that financing was not yet nailed down.

Musk’s tweet may have violated US securities law if he misled investors. On Monday, lawyers told Reuters Musk’s statement indicated he had good reason to believe he had funding but seemed to have overstated its status.

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