*By Kavitha Shastry*
Shares of Tesla ($TSLA) dropped more than 10 percent after hours Thursday after the SEC filed securities fraud charges against CEO Elon Musk.
In a complaint filed in federal court in Manhattan, the agency said Musk either "knew or was reckless in not knowing" that a series of statements he made about taking his company private were false or misleading.
Elon Musk responded to the allegations in a statement to Cheddar saying, "This unjustified action by the SEC leaves me deeply saddened and disappointed. I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way."
The SEC's charges stemmed from a [tweet](https://twitter.com/elonmusk/status/1026872652290379776) by Musk on August 7 that he had "funding secured" for a deal that would value the company at $72 billion. The post sent shares of the stock surging to 11-month highs, but an admission by Musk a few days later that he hadn't quite sealed a deal with a Saudi sovereign wealth fund ー followed by a [withdrawal](https://www.tesla.com/blog/staying-public) of his plans ー brought shares down as much as 35 percent.
Shortly after the first tweet, the SEC launched a probe into whether civil charges should be filed. In the actual lawsuit the agency is looking to bar Musk from serving as an officer or a director of any public company. The agency may also impose civil penalties and force him to pay back any "ill-gotten" gains he received from the stock's price fluctuations.
The Department of Justice is currently investigating whether to file criminal charges as well.
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