Earlier this week, the U.S. Securities and Exchange Commission (SEC) decided to file a lawsuit against Elon Musk accusing him of fraud after he tweeted that he had secured funding in order to take Tesla private at $420 per share. The latest reports coming in at the time of writing state that Mr Musk has come to a settlement with the SEC where he will step down as Tesla’s chairman, and pay a fine of $20 million.
The lawsuit was filed by the SEC on Thursday with a federal court in Manhattan. It said that Musk had made “false and misleading public statements and omissions” that “caused significant confusion and disruption in the market for Tesla’s stock” that resulted in harm to investors. Ironically, after the news of the lawsuit broke, the share price tumbled again.
According to the settlement filing, Musk will have to step down from his post as chairman of the board of directors of Tesla within 45 days and will have to remain out of the role for the next three years, luckily for him, he’ll be able to stay on as CEO at the firm.
With Musk initially causing the commotion via a tweet, the filing states that Musk is required to comply with company “oversight of communications relating to [Tesla] made in any format, including, but not limited to, posts of social media, [Tesla’s] website, press releases, and investor calls”.
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