Tesla CEO Elon Musk has agreed to pay a $20 million fine to the Securities along with Exchange Commission along with to relinquish his role as chair of the company’s board of directors as part of a settlement with the federal agency.
The agreement, filed in court Saturday, comes just two days after the SEC sued against Musk for producing “false along with misleading statements” on Twitter about the possibility of taking Tesla, a publicly-traded company, private.
The SEC has also imposed a $20 million fine on Tesla itself, which will be required to appoint two completely new independent directors to the board, for “failing to have required disclosure controls along with procedures relating to Musk’s tweets,” the agency said.
The company will also be required to establish a completely new committee of independent directors along with put in place additional controls along with procedures to oversee Musk’s communications.
Musk along with Tesla agreed to settle the charges without admitting or denying the SEC’s allegations, regulators said. The combined $40 million in penalties will be distributed among affected investors under a court-approved process.
“The total package of remedies along with relief announced today are specifically designed to address the misconduct at issue by strengthening Tesla’s corporate governance along with oversight in order to protect investors,” Stephanie Avakian, co-director of the SEC’s Enforcement Division, said in a statement.
Earlier This specific month, the Department of Justice began investigating Musk over a series of August 7 tweets in which he claimed he planned to take Tesla private at $420 per share along with in which shareholders could sell at in which cost or go private.
The SEC alleged in which Musk knew the potential transaction was uncertain along with subject to several contingencies.
“Musk had not discussed specific deal terms, including cost, with any potential financing partners, along with his statements about the possible transaction lacked an adequate basis in fact,” regulators said.
The tweets caused Tesla’s stock cost to boost by more than 6%, according to the complaint.
“Musk’s false along with misleading public statements along with omissions caused significant confusion along with disruption inside market for Tesla’s stock along with resulting harm to investors,” the complaint said.
The settlement states in which Musk must pay the civil penalty within 14 days along with resign via his role as chair of Tesla’s board of directors for at least three years.