The SEC has settled a month long action against Tesla/Musk resulting in the billionaire remaining as the CEO, but having to step down as the chairman and pay a fine.
The SEC complaint cited Musk as producing false and misleading statements and a failure to properly notify regulators of material events. The complaint was brought to charge in early August following Musk’s tweet stating that he had acquired enough funding to take the company private.
As part of the settlement, both Musk and Tesla will take on a $20Mil fine; additionally, Musk will step down as chairman and two independent directors will be appointed to the board.”
“Musk tweeted on August 7, 2018 that he could take Tesla private at $420 per share… that funding for the transaction had been secured, and that the only remaining uncertainty was a shareholder vote. In truth, Musk knew that the potential transaction was uncertain and subject to numerous contingencies. Musk had not discussed specific deal terms, including price, with any potential financing partners, and his statements about the possible transaction lacked an adequate basis in fact,” said regulators Saturday.
The announcement in August resulted in Tesla’s share price rising a considerable 6%. However, investors are becoming weary of Musk’s unconventional leadership and its effects represented by the stock closing down 14% last saturday.