If it feels like we haven’t heard from our old pal the boss of Tesla after a wild series of events I’ve taken to calling the Summer of Elon, it’s because he’s facing some serious allegations from the Securities and Exchange Commission over his failed Twitter plan to take the public company private. And the SEC’s complaint against Musk, which outlines its investigation so far, makes some incredibly damning and bizarre allegations against the CEO.

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To recap: on August 7, Musk tweeted that he had “funding secured” to take his nascent electric car company private. That funding never materialized, though it was later revealed he intended for the Saudi Arabian sovereign wealth fund to make the move happen. That fell through when it materialized Musk may have overplayed his hand; he later withdrew from this claim, saying Tesla would remain public on Aug. 25.

The SEC investigated the matter and now claims Musk made a “series of false and misleading statements,” and, in this civil complaint, is seeking to bar Musk from operating Tesla as CEO or director.

“It was virtually certain that he could take Tesla private at a purchase price that reflected a substantial premium over Tesla stock’s then-current share price, that funding for this multi-billion dollar transaction had been secured, and that the only contingency was a shareholder vote. In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source,” the complaint said.

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Musk countered the allegations today.

“This unjustified action by the SEC leaves me deeply saddened and disappointed,” Musk said in an email statement. “I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way.”

Why such an extreme reaction from the SEC? Let’s review some of the wilder moments from today’s 23-page complaint.

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He Set The $420 Share Price Maybe To Impress Grimes

Musk’s then-girlfriend, the musician Grimes, has said that he “got into weed” because of her, and that is apparently why he set the per-share price at $420:

According to Musk, he calculated the $420 price per share based on a 20% premium over that day’s closing share price because he thought 20% was a “standard premium” in going-private transactions. This calculation resulted in a price of $419, and Musk stated that he rounded the price up to $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend “would find it funny, which admittedly is not a great reason to pick a price.”

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It is not.

Musk Assumed A Lot From The Saudi Fund About Going Private

The document says Musk began meeting with officials from the Saudi sovereign investment fund way back in January 2017. After months of non-communication they met again at the end of July 2018. This is what happened, emphasis mine:

According to Musk, at the meeting the Fund’s lead representative told Musk that the Fund had recently acquired almost five percent of Tesla’s common stock on the open market, expressed interest in taking Tesla private, and confirmed that he was empowered to make investment decisions for the Fund. Musk later stated that he assumed without confirming that the lead Fund representative was proposing a “standard” going-private transaction, but the terms of any such deal were not discussed.

During the July 31 meeting, the lead Fund representative again raised the prospect of establishing a production facility in the Middle East. According to Musk, he expressed openness but made no commitment; Musk assumed that whether a Tesla production facility in the Middle East was a precondition to the Fund’s willingness to take Tesla private would depend on the amount of capital the Fund was required to commit to the transaction. Musk did not discuss his assumption with the representatives of the Fund.

The July 31 meeting lacked discussion of even the most fundamental terms of a proposed going-private transaction. For example, there was no discussion at the July 31 meeting of (1) any dollar amount or specific ownership percentage for the Fund’s investment in a going private transaction; (2) any acquisition premium to be offered to current Tesla shareholders; (3) any restrictions on foreign ownership of a significant stake in Tesla; (4) the Fund’s available liquid capital; (5) whether the Fund had any past experience participating in a going-private transaction; (6) any regulatory hurdles to completion of a going-private transaction; or (7) the board approval process necessary to take Tesla private.

Musk has acknowledged that the July 31 meeting was the most specific discussion of a transaction to take Tesla private between him and representatives of the Fund.

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So that’s a pretty far cry from “funding secured,” as he would tweet just a week later.

He Allegedly Took A Nonexistent “Offer” To His Board

But that didn’t stop Musk from telling Tesla’s board and other officers that he had an “offer,” including with a stated deadline:

On August 2, 2018, after market close, Musk sent an email with the subject, “Offer to Take Tesla Private at $420,” to Tesla’s Board of Directors, Chief Financial Officer, and General Counsel. In the email, Musk explained his reasons for wanting to take Tesla private, including that being public “[s]ubjects Tesla to constant defamatory attacks by the short-selling community, resulting in great harm to our valuable brand.” In the email, Musk asked that the “matter be put to a shareholder vote at the earliest opportunity” and stated that the “offer expires in 30 days.”

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This may be the most damning part of this complaint, if it is upheld.

And even so, he himself had his doubts when he sent the message to Tesla’s board, the document says:

According to Musk, he thought that there was “a lot of uncertainty” regarding a potential going-private transaction at the time of his August 2 email to Tesla’s board, “but it was worth investigating.” He believed at the time that the likelihood of consummation of a transaction was about 50%.

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Musk Didn’t Consult The Board When He Tweeted Funding Was Secured

This has been previously reported, but the complaint notes Musk’s claim came as a surprise to the board and the rest of management. In fact he’s accused of not discussing it with anyone before tweeting it to his 22 million followers. There was no formal proposal to the board.

These uncertainties notwithstanding, on Tuesday, August 7, 2018, Musk published a series of statements about a transaction to take Tesla private using his personal Twitter account. Musk did not consult with Tesla’s Board of Directors, any other Tesla employees, or any outside advisors about these tweets before publishing them.

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He also did not notify NASDAQ prior to the tweet, as that stock exchange’s rules require, the complaint says.

The Fund Wanted A Tesla Factory In The Middle East

That was a condition of funding, but something neither side agreed to, and which at least one member of Tesla’s board apparently had no interest in:

For example, the Fund had indicated that its investment might be contingent on Tesla building a production facility in the Middle East, a condition that would have significantly complicated any transaction, and to which neither Musk nor Tesla had agreed. At least one Tesla board member described such a condition as a “non-starter.”

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The SEC accuses Musk of making “reckless”, “false” and “misleading” statements, and basing them on things that had not been fully vetted or agreed upon by the parties involved:

At the time of these statements, Musk had not determined or even explored whether it would be possible (1) for individual investors to invest in Tesla if it was a private company; (2) for all current Tesla shareholders to remain invested if Tesla were to go private; (3) to create a “special purpose fund enabling anyone to stay with Tesla”; or (4) to hold liquidity events “every 6 months or so.”

In fact, Musk later admitted, “I thought the vast majority of existing investors would want to maintain their stake, and we would find a vehicle for small investors to participate. That latter part was a fundamental misunderstanding that I just did not know — I thought there would be some way to retain small investors, but there isn’t.” Musk’s statements regarding specific terms of a transaction to take Tesla private created the misleading impression that these terms had been decided upon, when in fact, they had not even been investigated or determined to be possible.

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And It Hurt Investors

Thanks to the price spike after Musk’s tweet, the SEC claims, which was followed by a drop when he withdrew his claim:

As a result of Musk’s false and misleading statements and material omissions, investors who purchased Tesla stock in the period after the false and misleading statements but before accurate information was made known to the market were harmed.

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And thus, this is why the SEC seeks Musk to be “prohibited from acting as an officer or director” of Tesla.