Elon Musk To Step Down As Tesla Chairman After SEC Settlement

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Musk has not tweeted about the SEC settlement.

Musk is now required to step down as chairman of Tesla within 45 days, and he is not permitted to be re-elected to the post for three years.

Musk will be replaced by an independent chairman who has yet to be named. As part of the SEC settlement, Tesla must "put in place additional controls and procedures to oversee Musk's communications".

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Mr Musk initially responded to the charges by saying the action was "unjustified" and he acted in the "best interests of truth, transparency and investors". This effectively means that the company wasn't vetting Musk's tweets to ensure they complied with the law.

In the tweets to his 22 million followers, he suggested he would take Tesla private at $420 per share - a substantial premium to its trading price at the time. Tesla must also add two new independent directors to its board. This likely means an end to his off the cuff remarks which include calling a rescuer a "pedo" guy. Saturday's settlement saw the SEC pull back from its demand that Musk be barred from running Tesla, a sanction that many investors said would be disastrous for the loss-making electric carmaker. Neither Musk nor Tesla are admitting any wrongdoing.

The fraud allegation relates to his August tweet in which he said he was considering taking Tesla off the stock market and into private ownership. Speaking of the settlements, both are still subject to court approval.

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