Tesla shares have been volatile for years, but even by its standards, August and September have been dramatic.
For the billionaire entrepreneur, it was the latest self-inflicted wound from a series of vehicle crashes that have battered Tesla's share price and Musk's reputation.
The deal would have seen both Elon Musk and Tesla paying a nominal fine along with one main penalty: the CEO could remain at his post but he could not serve as board chairman for two years. Musk apparently pulled out of the agreement at the last minute.More news: Apple's macOS Mojave update is now live and ready for download
"This unjustified action by the SEC leaves me deeply saddened and disappointed", Musk said in an emailed statement.
"When he made these statements, Musk knew that he had never discussed a going-private transaction at $420 per share with any potential funding source, had done nothing to investigate whether it would be possible for all current investors to remain with Tesla as a private company via a 'special objective fund, ' and had not confirmed support of Tesla's investors for a potential going-private transaction".
SEC officials detailed the chaos that ensued after Musk's tweet. Now the case looks set to go to court, another headache for Musk to deal with. 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.
Without disputing the reference to cannabis, Musk was quick to criticize the SEC's decision to bring an enforcement action.
Gordon Johnson, an analyst at Vertical Group who has been predicting a collapse in Tesla's shares for months, is less optimistic.More news: UK's labour opposition to vote against Brexit deal
"It was interesting that the number one investor in Tesla, Baillie Gifford, confirmed that they had not heard anyone regarding this go-private idea".
Tesla is the most-shorted stock in USA equities, with more than $10 billion tied up in short positions.
The board too issued a statement in support of Musk, saying it was "fully confident in Elon, his integrity and his leadership of the company".
Share value in Tesla is down more than 11.6 percent on the day, trading at $271.75 as of this writing.
Musk did not have funding secured at the time however, and while his company's stock hit an all-time high by the end of that day, it has been in freefall ever since.More news: President Trump Calls Kavanaugh Allegations A "Big Fat Con Job"