The chairman of Tesla, Elon Musk, agreed on Saturday to step down and pay a $20 million fine in a deal to settle charges brought by the Securities and Exchange Commission this week. The settlement, which now requires court approval, will allow Must to stay on as CEO but he must vacate his position of chairman of the board within 45 days. Musk will not be allowed to seek reelection for at least three years.
Musk accepted the deal with the SEC “without admitting or denying the allegations of the complaint,” according to a court document. Separately, Tesla to pay $20 million to settle claims it failed to adequately police Musk’s tweet.
This announcement from the SEC surfaced two days after the agency filed a lawsuit against Musk that claimed he misled investors. The suit focuses on tweets the chairman sent on August 7th in which he claimed he had secured funding to take Tesla private at $420 a share. This caused the company’s stock to soar. But according to the SEC, Musk had not secured the funding.
The lawsuit attempted 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.”
Jay Dubow, a veteran of the SEC’s enforcement division, said it was “unusual” that the SEC agreed to let Musk stay on as chief executive but leave the chairman role.
It’s surprising considering “the conduct at issue, if [the SEC] really thought it was egregious,” Dubow said. “The CEO is certainly more involved than the chairman in day-to-day operations.”
Does this move my Musk surprise you? We look forward to seeing your comments.