The Securities and Exchange Commission is suing Tesla CEO Elon Musk for fraud, though Tesla has not been named as a defendant, according to CNBC.
The charges are related to Mr. Musk's August tweets claiming that he was considering taking Tesla private and had already secured funding.
"A chairman and CEO of a public company has important responsibilities to shareholders," Stephanie Avakian, co-director of the SEC's division of enforcement. "Those responsibilities include the need to be scrupulous and careful about the truth and accuracy of statements made to the investing public, whether those statements are made in traditional forms such as a press release or an earnings call or through less formal methods such as Twitter or other social media."
Tesla share prices dropped by 13 percent in response to the news of the charges, though the Tesla board issued a statement supporting Mr. Musk.
"Tesla and the board of directors are fully confident in Elon, his integrity, and his leadership of the company, which has resulted in the most successful U.S. auto company in over a century. Our focus remains on the continued ramp of Model 3 production and delivering for our customers, shareholders and employees," the board said.