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SEC Settlement: Elon Musk Resigns as Chairman of Tesla, Stays as CEO, $40 Million in Fines Paid

posted by martyb on Sunday September 30 2018, @12:09PM   Printer-friendly
from the make-stupid-tweet-pay-stupid-fine dept.

takyon writes:

Tesla and CEO Elon Musk will pay $40 million to settle SEC case

Tesla and Chief Executive Elon Musk have settled a Securities and Exchange Commission lawsuit that alleged the outspoken businessman misled investors about his prospective effort to take the electric-car company private.

Musk and the Palo Alto company agreed to pay a total of $40 million, and he will give up his chairmanship for at least three years. Musk, however, will remain chief executive and retain a seat on the company's board of directors. Tesla, meanwhile, is required to install an independent chairman and add two new board members, according to terms of the settlement, which the SEC announced Saturday.

Musk and Tesla will each pay $20 million to settle the case; both reached the deal without admitting wrongdoing. The company declined to comment.

The SEC charged Musk with fraud Thursday, alleging that his tweets about taking Tesla private — at $420 a share — were "false and misleading." As part of the lawsuit, it asked a federal court to remove him from the company's leadership and ban him from running a public company.

Also at Reuters.

SEC Settlement announcement.

Previously: Elon Musk Considers Taking Tesla Private
Elon Musk Accused by SEC of Misleading Investors in August Tweet [Updated]

Original Submission

 
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  • (Score: 2, Insightful) by Anonymous Coward on Sunday September 30 2018, @01:17PM (2 children)

    by Anonymous Coward on Sunday September 30 2018, @01:17PM (#742072)

    Which is:

    "independent chairman and add two new board members,"

    Generally board members are major stock holders. The question here is: Who names the 3 parties? This constitutes a pretty significant change in the voting power of the board, and may result in Tesla being less agile.

     

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  • (Score: 4, Interesting) by takyon on Sunday September 30 2018, @01:31PM

    by takyon (881) <takyonNO@SPAMsoylentnews.org> on Sunday September 30 2018, @01:31PM (#742076) Journal

    If this supposed agility loss causes Tesla to stumble and die, who do we blame? The government or Musky's toked-up tweeting?

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    [SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]

  • (Score: 2) by fritsd on Sunday September 30 2018, @03:23PM

    by fritsd (4586) on Sunday September 30 2018, @03:23PM (#742091) Journal

    Aha, do you mean the new board members could be from Ford, General Motors and Fiat Chrysler, and put pressure on the company to produce novelty electrically-driven propeller hats instead of cars?

    A bit like when Microsoft injected Stephen Elop into Nokia.