Photo: Business Insider
It's been a hell of a week for Tesla CEO Elon Musk, and despite this latest news from the SEC front, things are probably far from over.
On Thursday, Musk has been formally charged by the Securities and Exchange Commission (SEC) with fraud, following a tweet he posted in August that made “false and misleading” claims.
The charges, it was later revealed, were made after Musk, through his lawyers, declined a settlement offer from the SEC, one that would have required him to pay a nominal fee and give up his role as Tesla chairman for two years.
Now, after being sued, Musk changed his mind and settled to somewhat harsher conditions. According to the SEC, the billionaire will have to pay a $20 million fine, and also give up on his role as Tesla chairman for the next three years.
But most importantly, Musk will be prevented from posting whatever crosses his mind on social networks and elsewhere by a new set of controls and procedures that will be set up oversee his communications.
Musk's place as Tesla chairman will be taken by an independent person, and two new independent directors will be appointed to the company's board. As an extra punishment, Tesla will have to pay a fine too, equal to that imposed on Musk.
All the $40 million in fines will be distributed to harmed investors under a court-approved process, says the SEC.
“The total package of remedies and relief announced today are specifically designed to address the misconduct at issue by strengthening Tesla’s corporate governance and oversight in order to protect investors,” said in a statement Stephanie Avakian, Co-Director of the SEC’s Enforcement Division.
Elon Musk will be allowed to continue working for Tesla as the company's CEO.
You can read the entire set of measures taken against Elon Musk in the document attached below.
The charges, it was later revealed, were made after Musk, through his lawyers, declined a settlement offer from the SEC, one that would have required him to pay a nominal fee and give up his role as Tesla chairman for two years.
Now, after being sued, Musk changed his mind and settled to somewhat harsher conditions. According to the SEC, the billionaire will have to pay a $20 million fine, and also give up on his role as Tesla chairman for the next three years.
But most importantly, Musk will be prevented from posting whatever crosses his mind on social networks and elsewhere by a new set of controls and procedures that will be set up oversee his communications.
Musk's place as Tesla chairman will be taken by an independent person, and two new independent directors will be appointed to the company's board. As an extra punishment, Tesla will have to pay a fine too, equal to that imposed on Musk.
All the $40 million in fines will be distributed to harmed investors under a court-approved process, says the SEC.
“The total package of remedies and relief announced today are specifically designed to address the misconduct at issue by strengthening Tesla’s corporate governance and oversight in order to protect investors,” said in a statement Stephanie Avakian, Co-Director of the SEC’s Enforcement Division.
Elon Musk will be allowed to continue working for Tesla as the company's CEO.
You can read the entire set of measures taken against Elon Musk in the document attached below.
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