Elon Musk Settles With SEC, Quits As Tesla Chairman

SEC Lawsuit Against Musk Wiped $7.3 Billion From Tesla’s Market Value

Elon Musk agrees to step down as Tesla Chairman, to pay $20 million fine

Tesla did not immediately respond to requests for comment.

Investors anxious that heralded a long-drawn out fight with the regulator that would see Tesla lose its talismanic leader, undermine its ability to raise capital and cripple operations as it ramps up production of its crucial Model 3 sedan.

Shares of Tesla Inc jumped almost 15 percent on Monday after Chief Executive Elon Musk settled a lawsuit from the US Securities and Exchange Commission (SEC) that sought to remove him from company management.

Mr Musk, whose tweets on August 7 on a plan to take Tesla private that was later abandoned, has tweeted only once since the settlement was announced - posting a music video by rap group Naughty by Nature.

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On Saturday, the SEC said that it also charged Tesla the same day "with failing to have required disclosure controls and procedures relating to Musk's tweets, a charge that Tesla has agreed to settle".

Loup Ventures Managing Partner Gene Munster noted that the SEC settlement is the best outcome possible from Elon Musk's "funding secured" fiasco.

The charges come after Musk claimed in August via a series of tweets that he was planning to take the electric vehicle maker private, and implied that such a move was imminent with "funding secured".

However, the CEO of Tesla, of course, Elon Musk may resume this position within 3 years and managed to remain as the CEO of Tesla.

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"The SEC's complaint alleged that, in truth, Musk knew that the potential transaction was uncertain and subject to numerous contingencies". "The resolution is meant to prevent further market disruption and harm to Tesla's shareholders".

Moreover, Both Tesla and Musk will pay $20 million in fines that will be distributed in a court-approved process to the investors that were potentially harmed by Musk's Twitter activity.

The settlement marked a swift end to the SEC's lawsuit, which was filed Thursday.

Neither Tesla nor Musk admitted wrongdoing under the settlement, which was reached two days after the regulator sued the billionaire over his tweeted claims to have had the funding and investor support to buy out stockholders at $420 a share.

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Under the agreement with the Securities and Exchange Commission (SEC), Musk and the company each will pay a $20m penalty, and Musk will be barred from serving as chairperson for at least three years.

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