SEC settles charges with Tesla’s Elon Musk, will remain as CEO 

DAVID MCNEW | AFP | Getty Images

Elon Musk speaks near a Falcon 9 rocket during his announcement that Japanese billionaire Yusaku Maezawa will be the first private passenger who will fly around the Moon aboard the SpaceX BFR launch vehicle.

The Securities and Exchange Commission has settled charges with Tesla CEO Elon Musk over his aborted bid to take the company private, with the billionaire expected to remain as the helm of the company but relinquishing his chairman title and getting slapped with a hefty fine.

As part of the settlement, which is still subject to court approval, Musk will also pay a civil penalty of $20 million and give up his role as chairman of the board for at least three years. Additionally, Tesla will also pay a $20 million fine, and appoint two new independent directors to the board.

The original SEC complaint alleged that Musk issued “false and misleading” statements and failed to properly notify regulators of material company events, after posting on Twitter that he had secured funding to take Tesla private.

Musk’s prolific use of Twitter has created several high-profile headaches for him personally, as well as the company he founded. In settling the charges, regulators faulted Tesla for not exerting more control over Musk’s tweeting.

“The SEC also today charged Tesla with failing to have required disclosure controls and procedures relating to Musk’s tweets, a charge that Tesla has agreed to settle,” the agency said in a statement.

“The settlements, which are subject to court approval, will result in comprehensive corporate governance and other reforms at Tesla—including Musk’s removal as Chairman of the Tesla board—and the payment by Musk and Tesla of financial penalties.”