Elon Musk resigns as Tesla chairman with multi-million dollar settlement

Devin Lawrence
October 1, 2018

However, according to the latest reports, the CEO of Tesla, the well-known vehicle manufacturing company, of course, Elon Musk resigns as chairman of Telsa.

Musk said that he had "funding secured" for a buyout of the electric-car company at $420 a share, reports The New York Times.

The electric auto maker is expected to report third-quarter production numbers on Tuesday, following a period of turbulence, including a run-in with securities regulators that culminated in Musk being ousted as Tesla's chairman and hit with a multimillion-dollar fine.

The agreement eases pressure on Tesla's embattled CEO, who faced potentially being barred from serving as an officer or board member of a publicly traded company as a result of the charges, which stemmed from a tweet by Musk about taking the company private. Tesla shares plummeted 14% on Friday, the biggest drop in nearly five years.

The SEC said Musk's statements on Twitter were "false and misleading" and that he had never discussed the plans with company officials or potential funders. Musk did not found Tesla but provided early financing. As part of the deal, Musk and Tesla will also both pay $20 million, while the former will neither admit nor deny the allegations.

Even after the stock's slide from last year's peak, Tesla is valued at $45.2 billion in the stock market.

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From the beginning of this case, the SEC requested as a penalty that Elon Musk had left the position of chairman from the board of Tesla, something that has now been achieved. Andrew Doane, who has a Model S sedan, Model X crossover and Model 3 vehicle and is president of the Tesla Owners Club of the Mid-Atlantic region, mustered club members to pull shifts at delivery hubs in Virginia and Maryland, and worked one himself.

"Shareholders with Tesla will be able to go to sleep tonight knowing the Musk will remain at the helm of the company". The $40 million in fines will be distributed to investors who claim to have been financially harmed by Musk's premature communications.

"When companies and corporate insiders make statements, they must act responsibly", SEC Chairman Jay Clayton said.

"The resolution is meant to prevent further market disruption and harm to Tesla's shareholders", said SEC enforcement division co-director Steven Peikin.

But its shares have been hit hard since the SEC filed the lawsuit.

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