The SEC says Mr Musk's claims that he had secured funding to take the electric carmaker private were "false and misleading".
It is seeking to bar Mr Musk from acting as an officer or director of a publicly traded company.
Mr Musk called the action "unjustified" saying he acted in the "best interests of truth, transparency and investors".
As per the BBC:
"Integrity is the most important value in my life and the facts will show I never compromised this in any way."Tesla's board of directors said in a statement that they were "fully confident in Elon, his integrity and his leadership of the company".
Leave corporate communications to the lawyers and professionals!