(CNN Money) -- The Securities and Exchange Commission has sued Tesla CEO Elon Musk for making "false and misleading" statements to investors.
The complaint hinges on a tweet Musk sent on August 7 about taking Tesla private.
"Am considering taking Tesla private at $420," Musk said. "Funding secured."
The SEC said he had not actually secured the funding.
"In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source," the SEC said in its complaint.
Tesla's stock dropped more than 5% in after-hours trading.
On the day of Musk's tweet, Tesla's stock shot up nearly 9%. It has declined substantially since then.
Musk abandoned the plan after less than three weeks. He later said his "funding secured" comment was based on talks with Saudi Arabia's sovereign wealth fund, which he said had urged him to take the company private and offered to increase its investment in Tesla.
Critics said such conversations were a long way from having "funding secured" for taking the company private at a stock price significantly higher than where it was trading.
The Justice Department is also investigating whether comments made by Musk, Tesla said last week. The company said it had received a voluntary request for documents and is cooperating. Tesla said it had not been subpoenaed.
Shareholders have also filed lawsuits charging that Musk made the claim to manipulate the stock price, and several news outlets reported that the Securities and Exchange Commission is looking into the matter.