CEO Elon Musk has agreed to step down as the Chairman of the Tesla Motors on charges of fraud. However, he remain as the Chief Executive Officer of the electric auto maker.
As per the reports, Elon will also pay 20 million US dollars as a part of settlement with the United States Securities and Exchange Commission (SEC). His resignation was within 48 hours after the US markets watchdog filed a lawsuit against Elon on charges of security fraud.
As per the settlement Elon will resign as the Chairman within 45 days and he will be banned from the office for next three years.
As per the agreed terms Tesla will pay another 20 million dollars to the commission and appoints two independent directors to its board and keep a close watch on Elon’s communications.
Elon was charged for tweeting “false and misleading” informations about the potential transaction to take the company private.
On August 7th Musk tweeted that he was considering taking Tesla private at $ 420 adding ‘funding secured’. “Am considering taking Tesla private at $420. Funding secured”.
In the complaint filed in the Southern District of New York, SEC allege that, “in truth, Musk had not discussed specific deal terms with any potential financial partners, and he allegedly knew that the potential transaction was uncertain and subject to numerous contingencies”.
It is also claimed that, his tweet caused Tesla’s stock price to jump by over 6 % on August 7th, and this led to remarkable market disruptions.