Elon Musk reaches deal with USA regulators

Andrew Cummings
October 2, 2018

The Securities and Exchange Commission asks Musk to remain the CEO of Tesla but only if he steps down from the position of Chairman for three years.

Tesla shareholders, Tesla fans, and Tesla customers all breathed a sigh of relief this week when it announced that founder and CEO Elon Musk had reached a settlement with United States regulators. In addition, Tesla agreed to appoint two more independent directors to its board, and exercise more control over Musk's statements on social media as well as via more traditional channels of corporate information.

The $40 million of penalties paid by Musk and Tesla will be distributed to investors harmed by Musk's tweet. Tesla has recently navigated numerous resignations among senior staff and a now-settled lawsuit with the SEC over insider trading following CEO Elon Musk's Twitter-induced manipulation of the stock price.

The move brings a conclusion to the SEC fraud charges over his infamous "funding secured" tweet.


However, SEC alleged that Musk has duped investors since he was completely aware of the fact that the potential transaction wasn't that secure.

Following the announcement that Musk would settle and step down as chairman, Tesla's stock stabilised after its 14 percent drop, shooting back up 15 percent at $305 per share.

The California-based electric carmaker, emerging from several months of turmoil around its Chief Executive Elon Musk, confirmed numbers leaked to an industry news site on Monday that showed it produced roughly 80,000 cars in the third quarter.

'.The lawsuit could serve as a wakeup call for Musk to tone down some of his public-facing behavior, particularly on Twitter, ' Munster explained.


Tesla in recent years has become one of the most valuable American vehicle maker, with its stock worth more than $50 billion.

As such, the company was also implicated in Musk's actions.

A row of new Tesla Model 3 electric vehicles is seen at a parking lot in Richmond, California, U.S., June 22, 2018.

In order to "achieve a victory beyond all expectations, Tesla must go "all out" on production on Sunday which marks the end of the quarter, Musk said".


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