The SEC alleges that Elon Musk's $420 price point was a weed reference to amuse his girlfriend (TSLA)

The Securities and Exchange Commission is suing Tesla founder and CEO Elon Musk.

The suit accuses Musk of false or misleading statements about taking Tesla private at $420 per share. As part of the filing, the SEC reveals what Musk says his reasoning was for the exact price point.

The filing says that Musk claims he calculated the $420 price point based on a 20% premium on the day's closing share price, which resulted in a price of $419.

"Musk stated that he rounded the price up to $420 because he had recently learned about the number's significance in marijuana culture and thought his girlfriend 'would find it funny, which admittedly is not a great reason to pick a price,'" the filing reads.

Azealia Banks shared this message between herself and what appears to be Grimes on Instagram in August. Kate Taylor

Musk's claims are in line with a series of text messages shared by rapper Azealia Banks on Instagram and in communication with Business Insider in August.

Banks had stayed in one of Musk's properties the weekend after he tweeted his plans to take Tesla private. While the pair only briefly interacted (Banks had been planning to collaborate with Musk's girlfriend, indie pop musician Grimes), she told Business Insider she saw the CEO "scrounging for investors."

In the texts with Grimes, which Banks posted on her Instagram story in August, Musk's girlfriend appears to state: "he got into weed cuz of me and he's super entertained by 420 so when he decided to take the stock private he calculated it was worth 419$ so he rounded up to 420 for a laugh and now the sec is investigating him for fraud."

Banks did not immediately respond to Business Insider's request for a follow-up comment, but tweeted that she is "really scared" for Musk following the news of the investigation. Grimes' representatives did not immediately respond to a request for comment.

The SEC investigation aims to bar Musk from leading a public company, due in part to false and misleading claims made on Twitter.

"Musk knew or was reckless in not knowing that each of these statements was false and/or misleading because he did not have an adequate basis in fact for his assertions," the complaint states.

Musk said in a statement that the SEC's actions have left him "deeply saddened and disappointed."

"I have always taken action in the best interests of truth, transparency and investors," Musk said. "Integrity is the most important value in my life and the facts will show I never compromised this in any way."

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