Elon Musk settles with Securities and Exchange Commission (SEC) and has agreed to step down as Tesla chairman, however Musk has avoided a management ban.
Last week the SEC began proceedings to sue Tesla and pursue the removal of Elon Musk from the firm, after accusing Musk of securities fraud over his series of “false and misleading” tweets about taking Tesla private last month.
Elon Musk is already facing two other lawsuits over the Twitter announcement he made in August saying he was considering taking the company private. Those lawsuits directly accuse Musk of a fraudulent effort to attack short sellers – financial traders Musk has previously criticised.
The SEC has also been seeking to ban Musk from acting as an officer or director of a publicly traded company, but Tesla’s board has openly backed the often-controversial Musk, saying they were “fully confident” in Musk.
Elon Musk, 47, is the world-famous face of Tesla and this move by the Securities and Exchange Commission to block Musk from being an officer of any public company, is a rare move against the CEO of such a well-known firm.
Tesla has since reached a settlement with the SEC, in a move that is sure to please investors, under which Elon Musk and Tesla will pay $20m (£15.3m) each. Musk is paying to settle the SEC fraud charges, and Tesla is also paying $20m to settle claims it failed to adequately police Musk’s tweet. Musk will also step down as board chairman within 45 days, and cannot seek re-election for three years.
Elon Musk mocks US regulator just days after settlement.
The now-ex Tesla chairman called the Securities and Exchange Commission (SEC) the “Shortseller Enrichment Commission”, and said it was doing “incredible work”.
Last week Musk agreed to step down as Tesla chairman and pay a $20m (£15m) fine over tweets he sent saying he had secured funding to take Tesla private.
The SEC has declined to comment on Musk’s latest tweet.