Musk to split a US$40 million penalty with the electric-car maker to settle fraud charges over his tweeted claims about taking the company private and must resign as chairman within 45 days<\/b>
\nElon Musk will relinquish the role of Tesla chairman and split a US$40 million penalty with the electric-car maker to settle fraud charges brought by the US over his tweeted claims about taking the company private.
Musk, 47, will get to keep his job as chief executive but must resign as chairman within 45 days and will not be able to get re-elected for three years, the Securities and Exchange Commission said Saturday. Neither Tesla nor Musk admitted wrongdoing under the settlement, which was reached two days after the SEC sued the billionaire over tweeted claims that he had the funding and investor support to buy out stockholders at US$420 a share.
\u201cAs a result of the settlement, Elon Musk will no longer be Chairman of Tesla, Tesla\u2019s board will adopt important reforms \u2013 including an obligation to oversee Musk\u2019s communications with investors \u2013 and both will pay financial penalties,\u201d Steven Peikin, co-director of the SEC\u2019s Enforcement Division, said in a statement. \u201cThe resolution is intended to prevent further market disruption and harm to Tesla\u2019s shareholders.\u201d
The settlement requires that Tesla appoint two new independent directors and establish a committee of independent board members. The company had come under criticism for years before Musk\u2019s take-private episode for lax governance, though shareholders sided with the board in June by voting against an independent chairman measure and approving the re-election of two directors.
\u201cThis is a good resolution for Tesla stakeholders,\u201d Ben Kallo, an analyst at Robert W Baird & Co, said in an email. \u201cI expect the stock to trade materially higher on this and into the quarter where we can focus on the fundamentals.\u201d<\/p>\n

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Similarity rank: 35<\/div>\n

Sentiment rank: -1.1<\/div>\n

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