TESLA Inc. on Tuesday said the Justice Department has opened an investigation into the company following Chief Executive Elon Musk’s surprise tweet in August that he had secured funding to possibly take the electric-car maker private.

The company said that last month it received a “voluntary request for documents” from the Justice Department, generally the first step in a federal investigation of this kind. Tesla said it hasn’t received a subpoena, a request for testimony or any other formal request.

Tesla said it is cooperating with the probe. “We respect the DOJ’s desire to get information about this and believe that the matter should be quickly resolved as they review the information they have received,” the company said in a statement.

A Justice Department spokeswoman declined to comment. Bloomberg News earlier reported the Justice Department had opened a criminal investigation against Tesla.

Shares of Tesla were down 3.2% in midday trading.

On Aug. 7, Mr. Musk surprised investors when he tweeted that he was considering taking Tesla private at $420 a share, about 20% above the stock’s trading price earlier that day. In his tweet, Mr. Musk said the buyout had “funding secured,” without providing any details.

Days later it was revealed that Mr. Musk was still lining up investors and funding for a proposed deal.

The Securities and Exchange Commission is also investigating Mr. Musk’s funding claim and subpoenaed Tesla seeking information from each of its directors. Some investors have sued Mr. Musk and the company, saying the CEO misled them and they lost money as a result.

A Justice Department investigation would likely be criminal because prosecutors often work in parallel with the SEC when there is an allegation of securities fraud, said Michael Liftik, a partner at Quinn Emanuel Urquhart & Sullivan LLP.

“If there is a civil case to be brought, the SEC would bring it,” said Mr. Liftik, a former SEC enforcement attorney. “If the conduct is such that it’s so serious that the DOJ or the local U.S. attorney’s office views it as potentially criminal, then they investigate the criminal side.”

The DOJ can use a variety of statues to prosecute criminal securities fraud, including the wire fraud statute, Mr. Liftik said. But prosecutors would have to show the misconduct was “knowing and willful,” and not just reckless, he said.

The go-private drama was one of several recent episodes that have caused some investors and analysts to question Mr. Musk’s fitness as CEO.

In July, he suggested on Twitter that a British cave explorer involved in rescuing a boys’ soccer team in Thailand was a pedophile, a claim he later apologized for and then reiterated. The man filed a defamation lawsuit on Monday against Mr. Musk. Tesla declined to comment, and Mr. Musk couldn’t be reached.

Earlier this month, Tesla shares tumbled after Mr. Musk appeared to smoke marijuana during a late-night interview broadcast live on YouTube.

Tesla has struggled for the past year to speed up production of its Model 3 sedan, placing Mr. Musk under intense scrutiny and raising questions about the company’s finances. In June, Tesla met its oft-delayed production milestone of building 5,000 Model 3 cars in a single week, a threshold that if sustained could help the company toward its goal of becoming cash-flow positive and profitable in the third quarter.

“We continue to believe fundamentals are strong headed into Q3 deliveries, but we acknowledge the noise around the stock makes it challenging to invest on fundamentals, currently,” Ben Kallo, an analyst for Baird Equity Research, said Tuesday in a note.

Tesla’s stock jumped 11% on Aug. 7 following Mr. Musk’s go-private tweets, which were sent during market hours. In the following days, Mr. Musk and Tesla’s board raced to assemble teams of financial advisers and lawyers to help facilitate complex negotiations.

On Aug. 23, Mr. Musk told the board he had decided not to follow through with a proposal. The next day, he ended the going-private talk by tweeting that “I believe the better path is for Tesla to remain public.” Tesla directors released a statement at that time saying “we fully support Elon as he continues to lead the company moving forward.”

Since Aug. 7, Tesla’s stock has fallen roughly 25% as prospects for a deal rose and fell. The shares are down roughly 8% this year after rising about 46% in 2017. - WSJ

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