Elon Musk has been forced to step down as chairman of Tesla top stories direct to your inbox SUBSCRIBE Invalid email Sign up to receive our rundown of the day'sdirect to your inbox When you subscribe we will use the information you provide to send you these newsletters. Sometimes they'll include recommendations for other related newsletters or services we offer. Our Privacy Notice explains more about how we use your data, and your rights. You can unsubscribe at any time. Mr Musk reached a settlement with the Securities and Exchange Commission (SEC) over a fraud suit and he will step down as chairman of Tesla’s board in 45 days. Both Tesla and Mr Musk will each pay $20million (£15million) to settle the case, but the serial entrepreneur will remain as chief executive. On August 7, Mr Musk tweeted that he had the funding in place to take Tesla private at $420 (£322) per share. The SEC said the claims were "false and misleading". The regulators said on Saturday: "Musk tweeted on August 7, 2018 that he could take Tesla private at $420 per share — a substantial premium to its trading price at the time — that funding for the transaction had been secured, and that the only remaining uncertainty was a shareholder vote. But ”in truth, Musk knew that the potential transaction was uncertain and subject to numerous contingencies. "Musk had not discussed specific deal terms, including price, with any potential financing partners, and his statements about the possible transaction lacked an adequate basis in fact,” they added. Mr Musk first responded to the charges by saying the action was "unjustified" and he acted in the "best interests of truth, transparency and investors". Elon Musk told Business Insider on Thursday: “This unjustified action by the SEC leaves me deeply saddened and disappointed. “I have always taken action in the best interests of truth, transparency and investors." Following Elon Musk's tweet Tesla's stocks rocketed by over six percent on August 7 Elon Musk tweeted that he had the funding in place to take Tesla private at $420 (£322) per share After Mr Musk's tweet, Tesla's stock rocketed by over six percent on August 7, the SEC said. However, since then the market value of Tesla has plummeted by $19.6 billion (£15billion), a drop of more than 30 percent. Shares of Tesla nosedived by nearly 14 percent on Friday, marking its worst one-day decline in nearly five years. Under the terms of the deal, Mr Musk will have to comply with company communications procedures when tweeting about the firm he co-founded. Elon Musk reached a settlement with the Securities and Exchange Commission (SEC) over a fraud suit<doc-sep>Elon Musk, the billionaire technology entrepreneur, will step down as chairman of the electric car company Tesla and pay a £15 million fine to settle fraud charges. The Securities and Exchange Commission (SEC), the American financial markets regulator, announced the deal with the electric carmaker’s chief executive on Saturday night. The settlement comes just two days after the SEC sued Musk for fraud and sought to have him barred from running Tesla or any other publicly-traded company. In August, Musk falsely claimed on Twitter that he had secured funds for a multi-billion dollar buyout of Tesla, leading its share price to soar and creating huge losses for “short-selling” investors who had bet against the company. “Am considering taking Tesla private at $420 [per share]. Funding secured,” Musk wrote on Twitter, after a meeting with Saudi investors who had expressed an interest in the company. It soon emerged that such a deal was far from guaranteed, and the SEC launched an investigation into the tweet.<doc-sep>Tesla CEO Elon Musk will step down as chairman of the electric automaker and pay a $20 million fine under a settlement reached with the U.S Securities and Exchange commission. Musk will remain CEO and he will still keep a seat on the board, just not as chairman. The agreement settles what could have turned into a bitter and potentially damaging fight for Musk, the company, and Tesla shareholders. Musk will resign from his role as chairman of the Tesla board within 45 days of the agreement, which was filed Saturday. He has agreed to not seek reelection or accept an appointment as chairman for three years. An independent chairman will be appointed, under the settlement agreement. Tesla will pay a separate $20 million penalty, according to the SEC. The SEC said the charge and fine against Tesla is for failing to require disclosure controls and procedures relating to Musk’s tweets. Musk doesn’t have to admit or deny the SEC’s allegations as part of the agreement. Tesla has also agreed to appoint two new independent directors to its board and establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications, according to the SEC. This likely means that Musk, who frequently turns to Twitter to unveils new products, features and updates on his multiple companies, will be more restricted moving forward. At least when it comes to his tweets about Tesla. “The resolution is intended to prevent further market disruption and harm to Tesla’s shareholders,” Steven Peikin, co-director of the SEC’s Enforcement Division said in a statement. The agreement marks the beginning of a new era of corporate governance for Tesla, which some shareholders have argued is too tightly controlled by Musk and others closely aligned to him such as his brother Kimbal Musk. Investor and founding board member Steve Jurvetson is still on leave. In 2017, Tesla diversified its board and added James Rupert Murdoch, the CEO of Twenty-First Century Fox Inc., and Linda Johnson Rice,Chairman and CEO of Johnson Publishing Company. Other board members include: Robyn Denholm, who joined the board in 2014, Brad W. Buss, who has been on since 2009, Antonio Gracias, and Ira Ehrenpreis, one of longest-serving board members who joined in 2007. The SEC filed a complaint Thursday in federal district court alleged that Musk lied when he tweeted on August 7 that he had “funding secured” for a private takeover of the company at $420 per share. Federal securities regulators reportedly served Tesla with a subpoena just a week after the tweet. Investigations can take years before any action is taken, if at all. In this case, charges were filed just six weeks later. The SEC said in the complaint that Musk violated anti-fraud provisions of the federal securities laws. The commission has asked the court to fine Musk and bar the billionaire entrepreneur from serving as an officer or director of a public company. Musk described fraud charges an “unjustified action” that has left him “deeply saddened and disappointed.” Tesla and the board later issued a joint statement supporting Musk. The complaint contains a number of eye-browing raising details, including that he had talked to the board about an offer to take Tesla private as early as August 2 when he sent to Tesla’s board of directors, chief financial officer and general counsel an email with the subject, “Offer to Take Tesla Private at $420.”<doc-sep>
Elon Musk has officially stepped down as chairman of Tesla Motors as part of a settlement with the US Securities and Exchange Commission, the agency announced today. He will maintain his role as CEO of the electric carmaker. The SEC brought securities fraud charges against Musk and Tesla last week, in response to Musk's ill-advised August 7 tweet claiming he had "funding secured" to take the automaker private at a share price of $420. According to the SEC complaint, Musk "knew that the potential transaction was uncertain and subject to numerous contingencies," and the Tesla chairman and CEO had "not discussed specific deal terms, including price, with any potential financing partners, and his statements about the possible transaction lacked an adequate basis in fact." Am considering taking Tesla private at $420. Funding secured. — Elon Musk (@elonmusk) August 7, 2018 As NPR reported on Thursday, the $420 share price was significantly higher than current trading prices of Tesla stock. Musk later admitted he had calculated the share price based on a 20-percent premium over trading prices at the time—and according to court documents, Musk rounded the resulting number up to $420 "because he had recently learned about the number's significance in marijuana culture and thought his girlfriend 'would find it funny, which admittedly is not a great reason to pick a price.' " The SEC says Musk's "funding secured" tweet caused Tesla stock prices to rise by more than six percent that day, with prices falling dramatically after the agency's actions against Musk were announced. As part of the settlement with the SEC, Musk has agreed t0 resign his post as Chairman of the Tesla board within the next 45 days; he will be ineligible for re-election as Chairman for three years. He will remain CEO of the automaker, though both Musk and the Tesla company will each pay a $20 million fine, with the $40 million total to be "dispersed to harmed investors by a court-approved process." Tesla will appoint a new independent Chairman and two independent directors to its board, and will "establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications." When reached by Road & Track, a Tesla spokesperson did not provide comment regarding the settlement.