Tesla says the US Department of Justice is investigating chief executive Elon Musk's public statements in August that he was considering taking the electric car-maker private, the latest and biggest threat to Musk and his leadership of the company.
The Justice Department asked Tesla for documents about Musk's announcement, Tesla said on Tuesday, describing it as a "voluntary request". The company said it was co-operating and that the matter "should be quickly resolved".
The probe by the Justice Department, which can press criminal charges, comes on top of a civil probe by the Securities and Exchange Commission and shareholder lawsuits.
The Justice Department declined to comment. Bloomberg reported earlier that federal prosecutors had opened a criminal fraud investigation. Tesla did not say whether the Justice Department probe was criminal or civil.
Musk surprised investors on August 7 with his plan to take Tesla private, tweeting that he had "funding secured" for a deal that would have valued the company at $US72 billion. In a separate tweet, he wrote: "Investor support is confirmed."
Tesla's shares rose after his tweet, but investors in the company's bonds and convertible debt were sceptical that the tens of billions of dollars needed for the buyout would materialise.
After two weeks of uncertainty, particularly over funding, Musk abruptly abandoned the plan on August 24, saying it would be even more time-consuming and distracting than anticipated, and that "most of Tesla's existing shareholders believe we are better off as a public company".
The SEC has already opened an inquiry into Musk's tweets, according to one person with direct knowledge of the matter, and short-seller Citron Research has sued Musk over the truthfulness of his tweet about secured funding. The SEC has not commented on the case.
"Any criminal investigation takes this up a level and creates more danger for the company and Musk," said Peter Henning, a lawyer who has worked for the SEC and the Justice Department.
To charge Musk with a crime, the Justice Department would need to show that he intended to manipulate Tesla's stock price, said Henning, now a law professor at Wayne State University.
For a civil enforcement action, the SEC would only need to show that Musk acted negligently, which is easier to prove, he said. The SEC could subject Musk to civil sanctions such as fines, relinquishing improper profits and a ban on running public companies.
If the Justice Department brings criminal charges against Musk and a trial results in a guilty verdict, the 47-year-old billionaire could face jail time, in addition to any financial penalties, said Jay Dubow, a former branch chief in the SEC's enforcement division.
