Elon Musk Sued For Defamation By Cave Diver Over 'Pedo' Remarks

Tesla Under Investigation by U.S. Department of Justice

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Elon Musk's August 7 tweet that he had "funding secured" to take Tesla private has become the subject of a criminal investigation by the Justice Department, Bloomberg reports, citing two anonymous sources.

Tesla is now under investigation by the Justice Department, Bloomberg reports, citing "two people familiar with the matter".

"A probe can go either way but finding Musk guilty may have serious negative repercussions to Tesla's stock price, which will badly hurt investors", Morningstar analyst David Whiston said. Plans to take Tesla private were later abandoned.

At its low point on Tuesday, Tesla shares were selling at $275 - down almost 30% from its recent high.

Tesla has not publicly commented on the DOJ probe as of this writing.

The investigation by the USA attorney's office in the Northern District of California follows a subpoena issued by the Securities and Exchange Commission seeking information from the maker of electric cars about Musk's plans to go private, which he has since abandoned.

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Shares recovered slightly after their initial drop, and are now down 5.4%, $15.97, at $278.87. After emailing Musk for comment, the site published his response in which he tells the reporter "stop defending child rapists".

No comment was available from Musk and on his Twitter account yesterday evening he was tweeting about his SpaceX mission.

In a blog seeking to temper outrage after his tweet, Musk said the Saudi Arabian sovereign wealth fund had approached him "multiple times about taking Tesla private", thus justifying his "funding secured" claim.

The case adds to a slew of litigation against Mr Musk, including over his running of Tesla, which the billionaire has said caused him severe stress.

Justice Department investigations are less common, and potentially more serious, because they entail possible criminal charges.

The DoJ investigation deals with the USA attorney's office in the Northern California district. The tweet initially sent the company's shares higher.

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Tesla has had to deal with significant turnover in its executive ranks, including this month's controversial departure of its chief accounting officer.

After news of the potential criminal investigation surfaced, Tesla stock tumbled 3.4 percent.

Unsworth said he is not a pedophile, child rapist, child sex trafficker, husband of a 12-year-old bride, or liar, and that the defamatory statements "were manufactured out of whole cloth by Musk" because of the disagreement over the mini-submarine.

Tesla had not "received a subpoena, a request for testimony, or any other formal process", Arnold said.

Last month, Musk said during an interview with The New York Times that he wrote the tweet in his vehicle on the way to the airport and no one reviewed it.

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