On Saturday, Elon Musk agreed to pay $20 million fine and step down as chairman of Tesla in a deal to settle charges against him brought by SEC.
The settlement requires court approval, and in the settlement, Musk will be allowed to stay as CEO but must leave role as chairman of the board within 45 days. He cannot seek re-election for three years.
According to the court document, Musk accepted the deal with the SEC without denying or admitting the allegations.
Apart, Tesla agreed to pay $20 million to settle claims it failed to adequately police Musk’s tweet.
The $40 million collected in penalties will be distributed to harmed investors under a court-approved process.
Tesla also agreed to appoint two new independent directors to its board and establish a board committee to overlook Musk’s communications.
The company declined to comment. A spokesperson confirmed Musk will be allowed to remain a member of the board.
Announcement from Securities and Exchange committee comes after two days the agency filed a lawsuit against Elon 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.
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