Elon Musk steps down as Tesla chairman in SEC fraud settlement

Wednesday, 03 Oct, 2018

This weekend's settlement made clear that Musk was neither accepting guilt nor denying the SEC's allegations.

As a quick reminder of what started all this, it was Elon's tweet in August saying he was looking at taking Tesla private and had "funding secured".

Moreover, Both Tesla and Musk will pay $20 million in fines that will be distributed in a court-approved process to the investors that were potentially harmed by Musk's Twitter activity.

As part of the settlement with the SEC, Tesla will also appoint an independent chairman and two independent directors, responding to calls on Wall Street to relieve the pressure on Musk and provide more balance in the carmaker's management.

The next challenge for Musk is proving he has the business savvy to steer Tesla into the promised land of profits.

Tesla sharply boosted the number of vehicles rolling off the assembly line between July and September, the electric auto maker said Tuesday.

In 2013, the company stated that it would use Musk's Twitter account as a means of announcing material information, however this has been diluted over the years by tweets of Musk's other firm, The Boring Company and various personal jokes.

As part of Elon Musk's settlement with the SEC, he agreed to resign from his role as chairman in 45 days.

As of Friday afternoon, Tesla's stock price dropped by 14 percent to $264.77, erasing $7.3 billion in shareholder value. The SEC also filed papers that charged Tesla with failing to exercise proper oversight over Musk's actions and laid out a separate settlement of those charges.

Tesla Motors accelerated production of its pivotal Model 3 sedan during the summer just as CEO Elon Musk promised, vindicating the electric vehicle maker's leader amid a backdrop of baffling behavior that jeopardized his job. He is staying on as CEO, but giving up his chairmanship.

The numbers initially lifted Tesla shares but they fell later as investors anxious about the company's warning that a 40-percent tariff on Chinese imports of its cars was blocking sales in the world's biggest electric auto market. Since starting the production of the electric sedan past year, the Model 3 ramp has been beset by multiple challenges, including bottlenecks in both the Fremont factory and Gigafactory 1.