Elon Musk to Pay $20 Million and Step Down as Tesla Chairman in Settlement with SEC
On September 29, 2018, it was announced that Elon Musk has agreed to pay $20 million and step down as chairman of Tesla as part of a settlement with the Securities and Exchange Commission (SEC). This decision comes after Musk’s tweet in August about taking Tesla private, which led to a lawsuit from the SEC alleging that Musk misled investors.
The SEC claimed that Musk’s tweet, in which he said he had secured funding to take Tesla private at $420 a share, was false and misleading. According to the SEC, Musk did not have a concrete plan in place and the funding was not secured. As a result, Tesla’s stock price rose dramatically following the tweet, before plummeting once it became clear that the deal was not as certain as Musk had portrayed.
As part of the settlement, Musk will not only pay a $20 million fine, but he has also agreed to step down as chairman of Tesla for at least three years. Additionally, Tesla will appoint two new independent directors to the board and create a committee of independent directors to oversee Musk’s communications regarding the company on social media.
In a statement, Musk expressed his respect for the SEC and the justice system, saying that the settlement is in the best interests of Tesla and its shareholders. He also reaffirmed his commitment to Tesla, stating that he believes the company has a bright future ahead.
This settlement marks a significant moment for Musk and Tesla, as it puts an end to a tumultuous period for the company. While Musk will remain as Tesla’s CEO, the agreement signals a new level of oversight and accountability for the company’s leadership. It remains to be seen how this will impact Tesla’s future, but one thing is clear: Elon Musk’s days as chairman of Tesla are now officially numbered.
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