Elon Musk. Photo: Steve Jurvetson via Wikimedia Commons

A Washington, D.C., law firm is demanding the U.S. Securities and Exchange Commission turn over documents involving a fraud investigation into Tesla and SpaceX CEO Elon Musk.

Levi & Korsinsky petitioned the U.S. District Court for the District of Columbia to compel the SEC's cooperation with a Freedom of Information Act request related to one of its class action cases. Levi & Korsinsky attorneys represent a group of Tesla investors who claim they were duped when Musk tweeted plans to take the company private. The law firm claims the records might help support claims that the tech entrepreneur misled the public and manipulated the market.

In a now deleted tweet published Aug. 7, Musk announced he was considering taking Tesla private at $420 a share. Two days after the post, the SEC filed a complaint alleging Musk violated the disclosure controls and procedures rules of the Securities Exchange Act and began digging into the accuracy of his statement. After media organizations reported that no such deals came close to being finalized, the company's stock plummeted. 

Levi & Korsinsky is specifically seeking documents related to the investigation into Musk's twitter activity, the reports and orders leading to the SEC probe, and notes on how each SEC commissioner voted on the settlement.

The SEC held back documents under an exemption that protects disclosures that could interfere with law enforcement activity, according to the complaint. To qualify for the exemption, the SEC first has to prove that law enforcement activity is ongoing and the information would cause articulable harm.

Levi & Korsinsky claim the SEC falsely invoked this rule. “Although the SEC has produced some of the requested documents, the SEC continues to withhold documents relating to the SEC's investigation into Musk's fraudulent tweets, and the SEC complaint and settlement, despite this proceeding being over,” the firm's representatives wrote in the case filing.

Musk and Tesla settled the SEC fraud charges in September without admitting guilt, agreeing to boot Musk from his chairman role, appoint two independent board directors, create processes to oversee his communications, and pay $40 million in fines—half of which penalized Musk personally.

Levi & Korsinsky points to that settlement as proof the SEC wrapped up proceedings, noting it was approved in the Southern District of New York last October, and Judge Alison Nathan's order amending final judgement as to defendants April 30.

The original complaint against Musk and Tesla, which has been consolidated and appointed a new lead plaintiff, claims the company's stock jumped 4% the day after the tweet, and Tesla securities buyers were harmed after his statement proved to be imprecise.

“Musk knew of the uncertain and contingent nature of any going-private transaction for Tesla as well as the lack of any secured funding at $420 per share or at any other price,” Levi & Korsinsky wrote in Wednesday's complaint. “Yet Musk published his tweets and other statements anyway, disrupting the markets in Tesla securities, such as stock and stock options, and causing billions of dollars of damage to Tesla investors.”

Tesla and Levi & Korsinsky did not respond to requests for comment at the time of publication.