*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.
American businesses that rely on Chinese goods are reacting with muted relief after the U.S. and China agreed to pause their exorbitant tariffs on each other’s products for 90 days. Many companies delayed or canceled orders after President Donald Trump last month put a 145% tariff on items made in China. Importers still face relatively high tariffs, however, as well as uncertainty over what will happen in the coming weeks and months. The temporary truce was announced as retailers and their suppliers are looking to finalize their plans and orders for the holiday shopping season. They’re concerned a mad scramble to get goods onto ships will lead to bottlenecks and increased shipping costs.
Shopping expert Trae Bodge discusses how talks between the U.S. and China is good news for now, but uncertainty remains for back-to-school and the holidays.
Jake Traylor, White House reporter at Politico, joins Cheddar to discuss how Trump is aiming to lower drug prices and how it differs from Biden's approach.
DJ X, alongside Molly Holder, Senior Director of Product Personalization, takes us inside Spotify's A.I. DJ and how it's the best new way to listen to music.
Sheryl Palmer, CEO of Taylor Morrison, talks tariff uncertainty, being a female leader in a male dominated industry and what homebuyers need to know. Watch!
