Tesla later admitted that it did not have the funding for the deal, and less than three weeks after his tweet, Musk walked back the prospect of going private.
Its shares fell 5.7 percent in after-hours trading.
"This unjustified action by the SEC leaves me deeply saddened and disappointed", he said in the statement.
"When he made these statements, Musk knew that he had never discussed a going-private transaction at $420 per share with any potential funding source, had done nothing to investigate whether it would be possible for all current investors to remain with Tesla as a private company via a 'special objective fund, ' and had not confirmed support of Tesla's investors for a potential going-private transaction".
"I have always taken action in the best interests of truth, transparency and investors. and the facts will show I never compromised this in any way". The Securities and Exchange Commission filed a lawsuit today against Musk, accusing him of making false public statements with the potential to hurt investors.
You can read the entire SEC court filing below.
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Joseph Grundfest, a professor at Standford Law School and former SEC commissioner, said Musk will likely want to avoid going to trial in the case and opening the door to "a lot of testimony about his state of mind".
The commission is asking the court for an order that would stop Musk from being "an officer or director" of any public company. Representatives from Tesla and the SEC didn't immediately respond to requests for comment.
The suit stems from Mr Musk's claim last month that he had secured funding to take the publicly-traded firm private. It said Musk would remain as Tesla's CEO until the matter was settled legally.
Shares of Tesla are swapping hands at right around $310 this morning.
Musk has long used Twitter to criticise short-sellers betting against his company, and several investor lawsuits have been filed against him and Tesla over the tweets.
Tesla's stock price increased by more than 6% from the time of Mr Musk's first tweet until the close of trading on 7 August and closed up 10.98% from the previous day, the regulator said. The tweet forced Nasdaq to suspend trading of Tesla shares August 7 for about 90 minutes.