Tesla and the US Securities and Exchange Commission have come to an agreement following the alleged securities fraud allegations that were the result of Musk’s tweet in August where he stated that he wanted to take the company private.
According to the terms of the agreement, Elon Musk will remain as the CEO of Tesla, but he will step down from his role as chairman of the board and pay a $20 million fine. Tesla will also pay a $20 million fine, bringing the total fine to $40 million. Elon Musk will not be allowed to be re-elected to the board chairman position for at least three years. Tesla will also appoint two new independent directors to its board and will also create a new committee of independent directors to oversee Elon Musk’s communications.
The SEC originally filed a lawsuit against Elon Musk, since the SEC stated, “Musk’s false and misleading public statements and omissions caused significant confusion and disruption in the market for Tesla’s stock and resulting harm to investors.” The SEC originally wanted Elon Musk banned from any director or officer positions. The $40 million fine will be distributed to harmed investors.