Tesla chairman of the board Elon Musk has been ordered to step down from that position and pay $20 million USD in fines. This was agreed upon in a deal between the Securities and Exchange Commission (SEC) and Tesla. The deal required court approval and Musk will be allowed to remain as the company CEO. Musk will need to wait for three years before he can seek reelection as Tesla chairman, should he desire the position back.
CNN says that Musk accepted the deal with no admitting of guilt or innocence. The $20 million USD fine isn’t the only cash being collected in this SEC deal. Tesla, the company, is also being fined $20 million USD and the collective $40 million will be given to “harmed investors” and distributed by the courts.
Tesla is also going to appoint two new independent directors to the board and establish a committee to oversee Elon Musk’s tweets and communications, meaning no more off the cuff tweets from the CEO.
The announcement from the SEC comes two days after the agency filed a lawsuit against Musk, claiming he misled investors. The suit centers on tweets Musk sent on August 7 in which he said he had secured funding to take Tesla private at $420 a share, causing the company’s stock to soar. He had not secured the funding, the SEC said.
The lawsuit sought to ban Musk from serving as an officer or director of any publicly traded company.
Musk called the SEC’s suit “unjustified.”
“I have always taken action in the best interests of truth, transparency and investors,” he said. “Integrity is the most important value in my life and the facts will show I never compromised this in any way.”
Musk has often operated his way which has rubbed many the wrong way. It will be interesting to see if anything changes with this SEC deal. It will also be interesting to see if Musk goes looking for the Tesla chairman seat in three years or not.
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