Shares of electric-car maker Tesla (NASDAQ:TSLA) were slammed during after-hours trading on Thursday when news broke that the SEC filed a complaint against CEO Elon Musk, stating he made "a series of false and misleading statements" on Twitter last month about the possibility of taking the company private. As of 6:03 p.m. EDT, Tesla stock was down 13.3% in after-hours trading on Thursday.

The SEC complaint points out a number of concerns about Musk's communication surrounding the possibility of taking the company private -- all of which began with an Aug. 7 tweet in which the CEO stated he was "considering taking Tesla private at $420," noting that funding had been "secured."

Three Tesla vehicles outside of the company's factory

Image source: Author.

Here's a closer look at the SEC's complaint

In addition to having a problem with Musk's initial tweet stating that funding had been "secured," the SEC also listed the following statements from Musk on Twitter as "materially false and misleading":

  • Musk noted that, if the transaction closed, shareholders would be able to either "sell at 420 or hold shares & go private."
  • Musk said, "Investor support is confirmed. Only reason why this is not certain is that it's contingent on a shareholder vote."

Regarding these statements from Musk, the SEC said, "Musk knew or was reckless in not knowing that each of these statements was false and/or misleading because he did not have an adequate basis in fact for his assertions."

As the SEC notes in its complaint, Musk's comments had a significant impact on the stock price, as shares surged over 6% between the time of the tweet and the end of the trading day. In total, shares closed the trading day up 11%, but some of that gain happened before the tweet.

The SEC is seeking some steep penalties from the court, including "orders of disgorgement, along with prejudgment interest, civil penalties, and an officer and director bar against Musk, and such further relief as the Court may deem appropriate."

Yes, you heard that right: The SEC is requesting that Musk be barred from serving as an officer or director of any publicly traded company.

Troubling times

Tesla stock was already dealt a blow leading up to the SEC's official complaint this week. Shares have tumbled since the Aug. 7 tweet as the media reported that the SEC was investigating the situation and as Tesla said the Department of Justice made a voluntary request for documents surrounding the potential go-private transaction. In addition, scrutiny surrounding Musk's statements about the possibility of taking the company private likely increased when the CEO ultimately decided the company should remain public.

In total, Tesla stock has fallen about 28% since Musk's Aug. 7 tweet. While investors should keep an eye on developments surrounding the SEC's complaint, one thing is already clear: Musk has some very good reasons to tone it down on Twitter.

Daniel Sparks owns shares of Tesla. The Motley Fool owns shares of and recommends Tesla and Twitter. The Motley Fool has a disclosure policy.