Elon Musk agreed Saturday to step down as chairman of Tesla and pay a $20 million fine in a deal to settle charges brought this week by the Securities and Exchange Commission.
Elon Musk agreed Saturday to step down as chairman of Tesla and pay a $20 million fine in a deal to settle charges brought this week by the Securities and Exchange Commission.
The SEC settled charges with Tesla CEO Elon Musk on Saturday, with Musk and the car company both required to pay $20 million each in the settlement over the aborted bid by the billionaire to take the company private. Musk will remain at the helm of the company but is no longer the CEO.
In the lawsuit on September 28, the SEC alleged “Musk’s statements, disseminated via Twitter, falsely indicated that, should he so choose, it was virtually certain that he could take Tesla private at a purchase price that reflected a substantial premium over Tesla stock’s then-current share price, that funding for this multi-billion dollar transaction had been secured, and that the only contingency was a shareholder vote.”
Global News reports that in a statement today, the SEC said, “Musk’s misleading tweets caused Tesla’s stock price to jump to over six percent on August 7, and led to significant market disruption.” Tesla itself was also charged with failing to have required disclosure controls and procedures for Musk’s tweets.
.elonmusk and SEC_Enforcement in tweet-enabled securities fraud case: ElonMusk to step down as chairman for 3 years, will pay $20M fine. 20M, add 2 independent directors, oversee tweets: AwJnit33hS — Alan Boyle (@b0yle) September 29,2018
The SEC claims that Musk chose the $420 stock price to impress his girlfriend, Montreal musician Grimes. The term “420” is commonly used to refer to marijuana.
“The settlements, which are subject to court approval, will result in comprehensive corporate governance and other reforms at Tesla—including Musk’s removal as Chairman of the Tesla board—and the payment by Musk and Tesla of financial penalties,” the statement added.
“The resolution is intended to prevent further market disruption and harm to Tesla’s shareholders,” added Steven Peikin, co-director of the SEC’s Enforcement Division, in a statement.
