Elon Musk accepted to step down as TESLA chairman for three years as part of a SEC settlement


Tesla will also pay a $20 million fine, get some new governance rules and the addition of two independent directors. But Musk will stay on as CEO and keep a seat on the board. Musk “neither admitted nor denied misleading investors under the civil fraud charge.” Tesla’s board of directors issued a statement on Thursday evening supporting Musk: “Tesla and the board of directors are fully confident in Elon, his integrity, and his leadership of the company, which has resulted in the most successful U.S. auto company in over a century.”


This suit was a civil claim and leaves open the possibility that the SEC is launching other investigations on more complicated issues or that the Department of Justice will get involved. SEC investigations inhibit the ability to raise capital in public markets for the company. The securities fraud agreement will come as a relief to investors. “I think this is the best possible outcome for everyone involved” said Ivan Feinseth of Tigress Financial Partners. Musk certainly crossed a legal line. However, the addition of two more independent directors, as also stipulated in the settlement, may give any candidate some hope of exercising real power.


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