Foreign media reported that Elon Musk reached a settlement with the SEC on Saturday. Musk will step down as chairman of Tesla in 45 days, but stay on as CEO.
The settlement was over musk’s August 7 tweet about taking Tesla private.
According to the SEC, Musk and the company will each pay a fine of $20 million, which will be “distributed to injured investors in accordance with a court-approved process.”
Under the deal, Mr Musk is required to step down as Chairman of Tesla within 45 days and is barred from re-running for the position for three years. Tesla also needs to appoint two new independent directors.
Not only that, Musk’s communications, including his tweets, will be monitored by lawyers.
In Saturday’s settlement, the SEC also relented and stopped short of demanding that Musk give up running Tesla. Many investors believe the penalty, if imposed, would be catastrophic for Tesla.
The SEC began investigating Musk and Tesla in early August, shortly after Musk abruptly announced on Twitter that he was considering taking the company private at a price of $420 per share. Musk said he had secured “financial security” to achieve the feat, and that investor support had been confirmed.
Mr Musk reportedly held several meetings with Saudi Arabia’s sovereign wealth fund to discuss backing the privatisation, but the SEC argued in its lawsuit that Mr Musk did not strike a solid deal and that his tweets were therefore “false and misleading” to investors.
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