Elon Musk has settled with the US Securities and Exchange Commission, which had sued him for fraud over his tweets about taking Tesla private. Musk will have to step down as chairman, but gets to keep his CEO status.
According to the settlement filing, Musk is given 45 days to step down as chairman of the board of directors of Tesla, Inc for three years. He will also have to pay a $20 million fine.
And since the whole affair started over a tweet, either careless or intentionally misleading, Musk is required to comply withcompany oversight and pre-approval of anything he says or posts about Tesla, "in any format, including, but not limited to, posts on social media (e.g., Twitter), the Companys website (e.g., the Companys blog), press releases, and investor calls."
Another $20mn will be paid by Tesla to settle claims it had failed to vet Musk's initial tweet.
READ MORE: Govt agency sues Musk for fraud, wants him barred from CEO positions
The SEC complaint accused Musk of misleading investors with his August 7 tweet which said he had secured funding to take Tesla private at $420 a share, boosting the company's stock by more than 10 percent. Musk soon recanted, saying he would keep Tesla private and triggering investors' fury. The SEC ruled Musk's initial words "were false and misleading because they lacked any basis in fact."
Musk himself claimed it was an honest mistake, writing in a blog post that he was was under the impression that he had secured the money in a meeting with the representative of the Saudi Arabian sovereign wealth fund.
Musk and the SEC were reportedly nearing a milder settlement before, which would only bar Musk from being chairman for two years and would not require him to admit guilt, but Musk pulled out of it on Thursday.
Then on Friday, Tesla stock tanked, apparently causing him to change his mind again and accept the harsher conditions. However, like the old deal, the new one mentions no requirement for Musk to admit his guilt in misleading investors.
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