LISTEN TO ARTICLE 3:48 SHARE THIS ARTICLE Share Tweet Post Email 
 
 Tesla Inc. is under investigation by the Justice Department over public statements made by the company and Chief Executive Officer Elon Musk, according to two people familiar with the matter. The criminal probe is running alongside a previously reported civil inquiry by securities regulators. 
 
 Federal prosecutors opened a fraud investigation after Musk tweeted last month that he was contemplating taking Tesla private and had “funding secured” for the deal, said the people, who were granted anonymity to discuss a confidential criminal probe. The tweet initially sent the company’s shares higher. 
 
 Tesla confirmed it has been contacted by the Justice Department. 
 
 “Last month, following Elon’s announcement that he was considering taking the company private, Tesla received a voluntary request for documents from the DOJ and has been cooperative in responding to it,” the company said in a statement released Tuesday following Bloomberg’s report of the investigation. “We have not received a subpoena, a request for testimony, or any other formal process. We respect the DOJ’s desire to get information about this and believe that the matter should be quickly resolved as they review the information they have received.” 
 
 The investigation by the U.S. attorney’s office in the Northern District of California follows a subpoena issued by the Securities and Exchange Commission seeking information from the electric-car maker about Musk’s plans to go private, which he has since abandoned. 
 
 The criminal inquiry is in its early stages, one of the people familiar with the matter said. Justice Department probes, like the civil inquiries undertaken by the SEC, can take months. They sometimes end with prosecutors deciding against bringing any charges. 
 
 Tesla shares dropped 3.4 percent to $284.96 on Tuesday and are down about 8.5 percent this year. 
 
 Abraham Simmons, a spokesman for the U.S. attorney’s office in San Francisco, declined to comment. 
 
 SEC Probe 
 
 SEC enforcement attorneys in the San Francisco office were already investigating Tesla before Musk sent his tweet on taking the company private, Bloomberg reported Aug. 9. The existing probe focuses on whether Tesla had issued misleading pronouncements on manufacturing goals and sales targets, according to the two people familiar with the matter. 
 
 It’s unclear whether the criminal investigation is that broad. Prosecutors in securities-fraud investigations could seek evidence on matters including whether company leaders intentionally lied to investors about the health of the business. 
 
 Morgan Stanley Sees $2.5 Billion Equity Raise for Tesla 
 
 Musk exposed himself to legal risk by tweeting Aug. 7 that he had the funding for a buyout even though that may not have been the case. Almost a week later, Musk said the basis for his statement was conversations with Saudi Arabia’s Public Investment Fund, which first expressed interest in helping take the company private in early 2017. 
 
 Abandoned Effort 
 
 Tesla’s board then said that it hadn’t received a formal proposal from Musk, who’s also the company’s chairman, nor had it concluded whether going private would be advisable or feasible. Less than three weeks after his initial tweets, Musk abandoned the effort. 
 
 Now that Musk’s tweeting has attracted the Justice Department’s attention, investigators there could extend their review to other public statements made by the CEO about the company’s health, according to one of the people familiar with the matter. Authorities could also look into the circumstances surrounding the resignation of Tesla’s Chief Accounting Officer, Dave Morton, after less than a month on the job, the person said. 
 
 For more on Tesla, check out the Decrypted podcast: 
 
 Morton, a former chief financial officer for computer hard-drive maker Seagate Technology Plc, joined Tesla one day before Musk tweeted that he was considering buying out some investors at $420 a share and taking the company private. 
 
 The EV maker could raise $2.5 billion in equity in the fourth quarter from investors that have strategic interest in its business model, Morgan Stanley analysts wrote in a note dated Sept. 18, outlining several possibilities. 
 
 — With assistance by Joel Rosenblatt, Eric Newcomer, and Kartikay Mehrotra 

 Tesla said the Justice Department requested documents last month regarding CEO Elon Musk's Aug. 7 tweets about taking the company private. 
 
 The shares sank by as much as 7.1 percent earlier Tuesday after news broke that federal prosecutors have opened a criminal probe looking at his comments. Musk tweeted on Aug. 7 that he had secured funding at $420 a share to take the electric car maker private, sending the stock soaring 11 percent, near an all-time high that day to $387.46. All of those gains — and then some — have since been erased. 
 
 Tesla acknowledged that the agency asked for documents from the company after Musk's now infamous tweet in a statement released Tuesday: 
 
 "Last month, following Elon's announcement that he was considering taking the company private, Tesla received a voluntary request for documents from the DOJ and has been cooperative in responding to it. We have not received a subpoena, a request for testimony, or any other formal process. We respect the DOJ's desire to get information about this and believe that the matter should be quickly resolved as they review the information they have received." 
 
 Bloomberg said the Justice Department is running the criminal investigation in tandem with a civil fraud probe by the Securities and Exchange Commission of Musk's comments. It cited two people familiar with the matter. 
 
 In addition, The New York Times reported that the SEC has sent subpoenas to Goldman Sachs and Silver Lake, both of which Tesla engaged to help it evaluate the take-private proposal. 
 
 Tesla's value has fallen by almost a third since his initial tweet, wiping away nearly $18 billion in market capitalization. The stock rebounded somewhat from its intraday low Tuesday but was still down by about 3 percent at $285.92 a share. 

 FILE- In this Monday, Sept. 17, 2018, file photo Tesla CEO and SpaceX founder and chief executive Elon Musk speaks after announcing Japanese billionaire Yusaku Maezawa as the first private passenger on... (Associated Press) 
 
 FILE- In this Monday, Sept. 17, 2018, file photo Tesla CEO and SpaceX founder and chief executive Elon Musk speaks after announcing Japanese billionaire Yusaku Maezawa as the first private passenger on a trip around the moon in Hawthorne, Calif. Tesla Inc. has turned over documents to the U.S. Justice... (Associated Press) 
 
 FILE- In this Monday, Sept. 17, 2018, file photo Tesla CEO and SpaceX founder and chief executive Elon Musk speaks after announcing Japanese billionaire Yusaku Maezawa as the first private passenger on a trip around the moon in Hawthorne, Calif. Tesla Inc. has turned over documents to the U.S. Justice... (Associated Press) FILE- In this Monday, Sept. 17, 2018, file photo Tesla CEO and SpaceX founder and chief executive Elon Musk speaks after announcing Japanese billionaire Yusaku Maezawa as the first private passenger on... (Associated Press) 
 
 DETROIT (AP) — Tesla Inc. has turned over documents to the U.S. Justice Department after statements by CEO Elon Musk about taking the company private, the electric car maker confirmed Tuesday. 
 
 The Palo Alto, California, company cooperated with the request and believes the matter should be resolved quickly once federal prosecutors review information they have received, according to a company statement. 
 
 News of a potential criminal investigation pushed Tesla stock down 5 percent in morning trading Tuesday, but the decline subsided a bit by early afternoon to 3 percent, at $286.67. 
 
 "We have not received a subpoena, a request for testimony, or any other formal process," Tesla's statement said. 
 
 Bloomberg News reported Tuesday morning that the Justice Department is running a criminal probe parallel to an investigation by the Securities and Exchange Commission. The news service cited two people familiar with the matter that it did not identify. 
 
 The Justice Department generally does not confirm or deny investigations, spokeswoman Nicole Navas Oxman in Washington said. 
 
 Tesla said it was contacted by prosecutors after CEO Elon Musk tweeted last month that funding was secured to take the company private. The announcement raised the stock price 11 percent in one day, but it has since fallen. 
 
 Later the company admitted that funding wasn't lined up and eventually Musk abandoned the idea. 
 
 Short-sellers, who bet against the stock appreciating, complained that Musk's announcement was done to manipulate the stock price and cost them money. 

 Breaking 
 
 The Dow Jones Industrial Average rose sharply on Tuesday on hope of hope for progress in two-day talks between the the U.S. and China. The Dow advanced 310 points, or 1.3%, at 23,841, the S&P 500 index climbed 1.1% at 2,577, while the Nasdaq Composite Index rose by 1.2% at 6,901. The Wall Street Journal reported, citing sources, that China and the U.S. had narrowed differences in their negotiations on trad, and were establishing a cabinet-level follow-up in talks for some time in January. Investors have been watching for signs of softening in the tensions from trade talks between Beijing and Washington, where have been key drivers for markets. The unexpected appearance of Chinese Vice Premier Liu on the first day of negotiations was praised by the U.S. delegation as a signal of the seriousness of the summit. On Tuesday, reports from WSJ indicated that progress had been made on purchases of U.S. goods and services but didn't offer precise details. In corporate news, shares of Sears Holdings Corp. tanked after reports indicated that the retailer would seek liquidation proceedings in bankruptcy. Shares of Tesla Inc. also were in focus after Oracle Corp. CEO Larry Ellison took a stake worth about $1 billion in the electric-car maker run by Elon Musk. Ellison was recently announced as a new Tesla board member.
– It's only Tuesday, and it's already been a roller coaster week of ups and downs for Elon Musk. The latest dip: Tesla confirmed Tuesday that it has complied with a voluntary request from the Justice Department to hand over documents related to Musk's August comments about possibly taking the electric car company private. The AP quotes a Tesla statement saying it has not "received a subpoena, a request for testimony, or any other formal process" and that it anticipates the matter should be put to bed quickly. CNBC adds the request was made in August. That news followed a Tuesday morning report from Bloomberg, attributed to two sources, that the DOJ had launched a criminal fraud investigation in parallel with the already announced SEC investigation. Bloomberg described the probe as in its early stages. Morningstar analyst David Whiston had this to say to Reuters: "For now this just brings more overhang to the stock and a probe will probably take months." The AP notes Musk's tweets initially drove shares up 11%, leading short-sellers to allege that Musk improperly manipulated the stock price. Tesla stock remains down nearly 4% for the day on the news, at $283.