Economy

Elon Musk Settles With SEC, Quits As Tesla Chairman

Elon Musk Settles With SEC, Quits As Tesla Chairman”

Tesla has turned to an army of volunteers to help it meet ambitious third quarter auto production targets after a bruising few days for chief executive Elon Musk, who was forced to pay $20m in order to settle a dispute with U.S. regulators.

Elon Musk has agreed to settle the securities fraud charge by the U.S. Securities and Exchange Commission (SEC) in a settlement that includes removing Musk as chairman at Tesla, and Musk and Tesla paying fines, the SEC said on Saturday in what analysts see as one of the fastest such settlements.

This is only the midpoint of his Musk-sational 2018 narrative.

Tesla jumped as much as 19% to $315.45 at 7:45 am NY time, more than enough to offset Friday's 14% plunge. Neither Musk nor Tesla admitted or denied the SEC's findings as part of the settlement.

But, like any responsible parent, the SEC doesn't give a sh*t if Elon likes them or not. The company's shares surged 16 percent in pre-market trading on Monday following the decision. Musk did not found Tesla but provided early financing. This SEC run-in may prove the white knight to a Tesla in distress, shackled to the whims of a stretched-too-thin executive.

In addition, Grimes' ex will be on a short leash: Tesla now gets to monitor the communications of the outspoken ex-chief gunslinger.

At the same time, Tesla has also settled new charges of "failing to have required disclosure controls and procedures relating to Musk's tweets", and will also pay a penalty of $20m.

Last week, the government charged Musk with making "false and misleading statements" to investors on his Twitter account when he said he had secured funding to take the company private.

He's made these assurances in large part due to progress Tesla has made in producing more Model 3 sedans - the first electric vehicle Tesla has tried to mass-manufacture.

Stephanie Avakian and Steve Peikin, co-directors of the SEC's Enforcement Division, led the talks, taking the reins from the staff attorneys who worked the case, according to two people familiar with the matter. Tesla had come under criticism for years prior to Musk's take-private episode for lax governance, though shareholders sided with the board in June by voting against an independent chairman proposal and approving the re-election of three directors.

The settlement marked a swift end to the SEC's lawsuit, which was filed Thursday.



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