Economy

Elon Musk steps down as Tesla Chairman after Controversial Tweet

Elon Musk steps down as Tesla Chairman after Controversial Tweet”

The rise pretty much makes up for the losses suffered Friday, after the Securities and Exchange Commission (SEC) officially sued Musk over his tweet about having secured funding for a plan to take Tesla private.

In a September 30 email, filed with the US Securities and Exchange Commission on Monday, Musk said the electric vehicle maker is nearing profitability.

Tesla shareholders, Tesla fans, and Tesla customers all breathed a sigh of relief this week when it announced that founder and CEO Elon Musk had reached a settlement with United States regulators. Musk and Tesla each will pay a penalty of US$20 million, with the total US$40-million penalties to be "distributed to harmed investors under a court-approved process".

In a statement, the SEC added that the settlements are subject to court approval and that they would also require comprehensive corporate governance and other reforms at Tesla.

Amid a slew of controversies surrounding Tesla CEO Elon Musk, there comes some good news for the electric-car company's investors and staff as the tech billionaire has now said that the company is close to achieving profitability.

"The resolution is meant to prevent further market disruption and harm to Tesla's shareholders", Steven Peikin, co-director of the SEC's Enforcement Division, said in the statement.

Elon Musk will be stepping down as Chairman of Tesla but will remain CEO. The revelation follows a $55 million lawsuit filed by the US regulator

That's all on top of Tesla's hard-to-watch 2-year struggle to meet production goals on their new Model 3 (though, they did meet their Q3 goal). "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", the SEC claims.

But several experienced litigators also said that, while the DOJ probe is separate, the SEC's settlement might mark the end of official action against Tesla and Musk.

In order to avoid similar inconvenience in the future, the company will also hire a lawyer that will not only monitor the communication of Musk but also oversee his tweets.

After Musk settled over the weekend, Tesla surged on Monday and closed up 17%.

Musk, a co-founder of Tesla, is the company's largest stockholder, owning approximately 22 per cent of its outstanding shares.

'.The lawsuit could serve as a wakeup call for Musk to tone down some of his public-facing behavior, particularly on Twitter, ' Munster explained.



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