Tesla’s board backs Musk as US watchdog SEC sues him

Tesla’s board stood by chief executive officer Elon Musk after the US watchdog, Securities and Exchange Commission (SEC), sued him for his “false and misleading” tweet last month about a buyout of the electric-car company.

The SEC is seeking monetary penalties and a judicial order that bars Tesla’s founder from serving any public company in a similar position.

Expressing its confidence in Elon’s integrity and leadership, the board said their focus will be on Model 3 production amid reports that Tesla has already achieved the target with two days still to go before the end of the quarter.

However, the possibility of Musk losing control of Tesla upset investors who dumped the stock, driving it down 10% in pre-market trading.

Musk said he was disappointed by SEC’s “unjustified” lawsuit adding that he had always acted with integrity in the best interests of truth, transparency and investors.

SEC has not named Tesla in the lawsuit.