The SEC’s rule 14e-8 basically prohibits publicly traded companies from announcing any plans to buy or sell securities if the executives don’t intend to follow through, don’t have the means to complete the deal or are flat out trying to manipulate the stock price.

That regulation is one that Musk may or may not have violated when he nonchantly tweeted Tuesday that we was considering taking the electric car manufacturer private and had “funding secured, according to securities lawyers.

Whether it was impluse or design, it is likely that the Securities and Exchange Commission has already opened an investigation and is looking for documentation to back up Musk’s comments, according to former SEC enforcement lawyers.

The Wall Street Journal reported on Wednesday that the SEC has, in fact “made inquiries” to find out whether his claim was true, citing people who are familiar with the matter.

“I can’t imagine that the enforcement division hasn’t opened a file, that they are not calling his counsel or him and saying ‘we would like whatever papers you have about this, if you have written anything down, if you have talked to lenders, if you have materials about that we would like to see them,'” said Tom Gorman, a former senior enforcement attorney with the SEC and a partner at Dorsey & Whitney in Washington, D.C.

“And right after we have finished seeing all that stuff, we would like to talk to you.” he added.

Investors are not too convinced that Musk has actually secured funding. If that is true, then it could mean that both him and Tesla are in for some extremely rough waters ahead.

“There is skepticism as to where this money comes from. It doesn’t make sense,” Efraim Levy, an analyst at CFRA, told CNBC. “The reason it is trading at a discount is because of uncertainty as to whether the deal will come to fruition. If it doesn’t come through, the stock is going to crater.”

“He is claiming there is a specific source of the funding so that had better be true. He has also claimed there is a specific amount available for funding. That has to be true. Otherwise, even if it’s not manipulation it would be fraud, so he’s got two potential areas of difficulty right there,” former SEC Chairman Harvey Pitt told CNBC.

Musk’s frequent complaints about “relentless attacks from short sellers” have raised questions about whether or not he was intentionally trying to drive the shares higher, which would meet the definition of market manipulation and carry possible criminal penalties, securities lawyers say.

Tesla still has not specified where  it’s getting the more than $71 bn that it would cost to take the company private. Wall Street bankers also don’t know, suggesting Musk has secured financing elsewhere. But that seems implausible given the size of the deal, which would require multiple banks, and cult-like interest in Musk and Tesla, dealmakers and analysts say.

If Musk’s statements weren’t true, he runs the risk of paying damages to investors who lost money on his tweets as well as criminal prosecution, Pitt said.

Peter Henning, a law professor at Wayne State University, called it “backwards corporate governance.”

“You don’t announce a price and then negotiate. There are a lot steps left in this,” he said. “There is a whole process they have to go through or they are going to get the daylights sued out of them.”

Investors, meanwhile, are still confused.