Tesla Inc. (TSLA.O) fell as the U.S. Securities and Exchange Commission sent a subpoena to the electric-car maker regarding Elon Musk’s plans to take it private and his claim to have had “funding secured” for the deal.

Wednesday’s drop of as much as 4.5 per cent wiped out last week’s advance fueled by Musk’s tweets and news that Saudi Arabia’s wealth fund bought a stake in the company. Fox Business reported that the SEC sent the subpoena, citing sources it didn’t identify, and said it signaled the agency’s investigation had reached the formal stages.

The stock settled down 2.57 per cent on Wednesday shedding US$8.95 at US$338.69.

SEC spokeswoman Judith Burns and a Tesla spokesman declined to comment.

At the center of the controversy is what Musk meant when the chief executive officer tweeted Aug. 7 that he had the funding for a buyout, without providing specifics to back up the claim. Almost a week later, Musk said his confidence was based on conversations with Saudi Arabia’s Public Investment Fund, which first expressed interest in helping take the company private in early 2017.

Musk had also tweeted on Monday that Goldman Sachs Group Inc. and Silver Lake would act as financial advisers, but neither had officially signed on at that point, said people familiar with the matter. Goldman Sachs on Wednesday suspended its ratings and price target for Tesla stock citing its role as an adviser.

In addition to the SEC investigation, Tesla will likely need approval of U.S. national security officials if Saudi Arabia finances the effort to take the company private. President Donald Trump’s administration is stepping up scrutiny of foreign investment in American technology.