U.S. securities regulators are asking a federal court to oust Tesla Inc.’s Elon Musk as chairman and CEO, alleging in a complaint that he committed securities fraud with false statements about plans to take the company private.

The Securities and Exchange Commission says in the complaint filed Thursday that Musk falsely claimed in an Aug. 7 statement on Twitter that funding was secured to go private at $420 per share, a substantial premium over the price at the time.

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The complaint filed in U.S. District Court in Manhattan says that Musk had not discussed or confirmed key deal terms including price with any funding source. It also asks for an order enjoining Musk from making false and misleading statements along with repayment of any gains as well as civil penalties.

“Corporate officers hold positions of trust in our markets and have important responsibilities to shareholders,” Steven Peikin, co-director of the SEC’s Enforcement Division, said in a statement. “An officer’s celebrity status or reputation as a technological innovator does not give license to take those responsibilities lightly.”

An SEC press release says the agency asked the court for a “bar prohibiting Musk from serving as an officer or director of a public company.”

Musk, in a statement issued by Tesla, called the SEC action unjustified. “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,” the statement said.

The complaint alleges that Musk’s tweet harmed investors who bought Tesla stock after the tweet but before accurate information about the funding was made public.

Ousting Musk, who has a huge celebrity status with more than 22 million Twitter followers, would be difficult and could damage the company. He’s viewed by many shareholders as the leader and brains behind Tesla’s electric car and solar panel operations.

Peter Henning, a law professor at Wayne State University and a former SEC lawyer, said it’s the first fraud case involving use of social media by the CEO of a public company. Musk and Tesla didn’t fully disclose details of the plan in the Aug. 7 tweet or in later communications that day as required, he said.

“You can’t make full disclosure in 280 characters,” he said, referring to the length limit of a tweet.

Musk, he said, is among the highest-profile CEOs in recent memory that the commission has gone after with this stiff of a penalty threat.

Joseph Grundfest, a professor at Stanford Law School and former SEC commissioner, said Musk will likely want to settle before trial so that he could conceivably stay on as CEO, with some constraints such as prohibiting him from making public statements without supervision. But Musk also could agree to step down as CEO and instead take another title, such as chief production officer.

The Wall Street Journal, citing people familiar with the matter, reported that Musk had been close to settling with the SEC but that he and his lawyers decided at the last minute to fight the case. Tesla did not immediately respond to a request for comment on the report.

“One possibility could be to appoint someone as a monitor over all of his communications. He wouldn’t be able to tweet or post anything directly without the approval of a chaperone,” Grundfest said. “He is not going to be able to remain as CEO with no conditions. That is not on the table.”

Grundfest also said that the challenge for the SEC is to “appropriately discipline Musk while not harming Telsa’s shareholders.”

According to the complaint, Musk met with representatives of a sovereign investment fund for 30 to 45 minutes on July 31 at Tesla’s Fremont, California, factory. Tesla has identified the fund as Saudi Arabia’s Public Investment Fund, which owns almost 5 percent of the company.

Fund representatives expressed interest in taking Tesla private and asked about building a factory in the Middle East, Musk told the SEC. But at the meeting, there was no discussion of a dollar amount or ownership stake for the fund, nor was there discussion of a premium to be paid to Tesla shareholders, the complaint said. Musk told the SEC that the lead representative of the fund told him he would be fine with reasonable terms for a go-private deal.

“Musk acknowledged that no specific deal terms had been established at the meeting and there was no discussion of what would or would not be considered reasonable. Nothing was exchanged in writing,” the complaint stated.

The SEC alleged in the 23-page complaint that Musk made the statements using his mobile phone in the middle of a trading day. That day, Tesla shares closed up 11 percent from the previous day. Musk has said that he posted the go-private tweet while driving to the airport and that no one reviewed it.

The statements, the complaint said “were premised on a long series of baseless assumptions and were contrary to facts that Musk knew.” Later in the month, Tesla announced that the go-private plan had been scrapped.

Shares of Tesla plunged nearly 12 percent to $270.90 in after-hours trading after falling just under 1 percent during regular trading hours Thursday.

In its complaint, the SEC said that Musk’s statements hurt short sellers, investors who borrow a company’s stock betting that it will fall. Then they buy the shares back at a lower price and return them to the lenders, pocketing the profit.

In August, more than $13 billion worth of Tesla shares were being “shorted” by investors, the complaint said, as the stock was under pressure due to questions about Tesla’s finances and Musk’s erratic behavior.

Mark Spiegel, a short-seller and constant Musk critic, applauded the SEC for pursuing what he predicted would be easy for the government to prove.

“Musk has a long history of easily proven lies,” Spiegel said. “This is just the first one that he is being held accountable for.”

Spiegel also echoed the concerns of corporate governance experts who have lambasted Tesla’s board for being too beholden to a CEO that they are supposed to oversee.

“They should have fired him a long time ago. Will they now? I don’t know,” Spiegel said.

There was no indication of that in a joint statement issued late Thursday by Tesla and its board.

“Tesla and the board of directors are fully confident in Elon, his integrity, and his leadership of the company,” the statement said.

Musk also failed to notify the Nasdaq stock exchange, on which Tesla shares are traded, before releasing the go-private tweet. Nasdaq rules require notification of plans to release “material information” at least 10 minutes before the release, according to the SEC complaint. The tweet forced Nasdaq to suspend trading of Tesla shares oon Aug. 7 for about 90 minutes.