Elon Musk has reached a settlement with the Securities and Exchange Commission in regards to the lawsuit filed against him last week.
Musk had been sued by the S.E.C. in regards to tweets he posted on his personal Twitter account in August implying he was planning to take the company private. He then went on to say that he had “funding secured” and that the buyout of the shares would be at $420 per share.
According to sources speaking with The New York Times, Musk was under growing pressure from investors as well as his lawyers to settle the suit. In the settlement, he is being $20M and must step down as the chairman of Tesla’s board for three years, but he is allowed to retain a seat on the board. He is also allowed to remain in place as the CEO of the company, a position that would have been in jeopardy would he have gone to court.
Under the terms of the settlement, Musk was not forced to admit guilt, but he is also not allowed to deny he was guilty of the charges.
Moving forward, Tesla is installing two independent directors and will also begin monitoring Musk’s communications with investors. A committee of independent directors are also being installed to monitor all future disclosures from the company.
The S.E.C. still has more probes ongoing at Tesla, mainly in regards to claims of production goals, but, for now, the case with Musk appears to be closed. The next step is for the board to make a decision as to potential replacements as the chairman.