I have always wondered whether Elon Musk is a hero or a hustler.  Or maybe both (like Thomas Edison).  Now, the flamboyant inventor-entrepreneur recipient of vast federal subsidies faces a powerful and unforgiving regulator.

Emily Glazer and Dave Michaels of the Wall Street Journal report:

Federal regulators have subpoenaed Tesla Inc., TSLA -2.57% ramping up an investigation into Chief Executive Elon Musk's tweet last week that he had secured funding to take the electric-car maker private.

The subpoena from the Securities and Exchange Commission seeks information from each of Tesla's directors, according to a person familiar with the matter.  It isn't known what information is being sought.

Representatives for the SEC and Tesla declined to comment.

The Wall Street Journal previously reported that the SEC has made preliminary inquires about Mr. Musk's basis for writing on Twitter last week that he had "funding secured" for a deal.

The subpoena indicates senior SEC officials have authorized a formal investigation of the company, a step up from the initial inquiries the regulator made to Tesla last week.  The SEC opens formal investigations when it thinks that a violation of law has occurred and that a probe is justified given the nature of the suspected misconduct and the potential harm to investors.

Under U.S. law, companies and corporate officers can't give shareholders misleading information about meaningful company events.

It is possible that Musk lined up his ducks and can prove that at the time of his tweet that sent his Tesla stock soaring, he had a commitment of funding from the Saudi investors who are supposed to be financiers for the deal.  For his sake, I hope so.  The SEC is one of the most feared agencies in the corporate world, second only to the IRS.

But while I admire the achievements of SpaceX, another Musk company, and I have great hopes that his hyperloop transportation system proves to be practical, safe, and economical, I seriously resent the many billions of dollars of federal subsidy Tesla enjoys.  Buyers of Tesla cars are far above average income and get a huge dose of self-satisfaction from the virtue-signaling they impute to a car that burns coal or natural gas (via electricity generation) instead of gasoline.  And studies suggest that the total energy consumed by electric vehicles, including transmission line losses, manufacturing the cars and batteries, and the essential recycling necessary for the toxic metals in the batteries, exceeds that carbon dioxide emissions from the total cycle of a conventional gasoline-powered auto.

Photo credit: Steve Jurvetson via Wikimedia Commons.