By Conor White
Shares of Tesla fell as much as 14 percent Friday on the news that the Securities and Exchange Commission has filed a lawsuit against CEO Elon Musk.
The suit, which alleges Musk committed fraud, is the biggest domino to fall in the wake of the Tesla ($TSLA) CEO's now-infamous "funding secured" tweet. After Musk's initial post on Aug. 7, the SEC launched an investigation which lasted under two months. It's a quick turnaround ー and a rare one at that, said Fortune senior writer Jen Wieczner.
"They said it was very clear cut," Wieczner said Friday in an interview on Cheddar. "It's not usually this fast, this was less than a couple months. They usually can take months, even years, for them to come to a conclusion."
Musk was reportedly offered a deal by the SEC, which would've fined the CEO and barred him as chairman for two years. But the deal did not require him to admit any guilt. Musk apparently pulled out of the agreement at the last minute.
In the absence of a deal, SEC action could ultimately remove Musk from the company permanently and prohibit him for life from serving as an executive or director at any public company. The charges also open up Tesla to lawsuits from investors who bought and sold shares based on Musk's tweet.
Wieczner noted this behavior is nothing new for the outspoken chief.
"He doesn't think he did it," she said. "This is sort of classic Musk. We see a lot of ego, we see arrogance, confidence. We've seen that on earnings calls where he'll do what he wants."
"I think Elon is saying, 'I didn't do it, we're going to court.'" Wieczner added.
Wall Street is showing its concern over the investigation, with some analysts believing Musk's departure could cost individual Tesla shares hundreds of dollars.
"I think it's just so tied to his personality that it's really unclear," Wieczner said. "Will investors stick with Tesla if Elon Musk isn't there?"
So far, they don't seem to be ー Friday's drop was the biggest one-day percent loss for Tesla since January 2012.
For full interview click here.