Elon Musk Steps Down as Chairman, Settles With SEC
Consequences have come swiftly for Elon Musk.
Less than two months after he tweeted that he had secured enough funding to take Tesla back private, and just a few days after being charged with securities fraud, Musk has settled with the Securities and Exchange Commission after the SEC charged him with “false and misleading” statements and a failure to properly notify the regulators of material company events.
The settlement is still subject to court approval, but it requires Musk to step down as chairman of the board for at least three years and to pay a civil penalty of $20 million. He must step down from the chairman role within 45 days, but he will remain CEO. Tesla itself will also be slapped with a $20 million fine. It’s expected that Tesla will add two new and independent directors to the board.
“Musk tweeted on August 7, 2018 that he could take Tesla private at $420 per share — a substantial premium to its trading price at the time — that funding for the transaction had been secured, and that the only remaining uncertainty was a shareholder vote,” the SEC said. “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.”
More from the SEC: “The SEC also today charged Tesla with failing to have required disclosure controls and procedures relating to Musk’s tweets, a charge that Tesla has agreed to settle.”
Musk has continually tweeted himself and Tesla into hot water, but this obviously goes beyond bad PR or a drop in stock price. Part of the settlement is an agreement by Tesla that its board will “oversee” Musk’s communications with investors. It’s unclear if this means his tweets will be filtered before they hit the web. Whether the changes in Musk’s role and communications with investors will result in a better-run company remains to be seen.
Also remaining to be seen — the effect on the company’s stock price. It was down about 14 percent at closing time Friday, to $264 a share.
Latest Car ReviewsRead more
Latest Product ReviewsRead more
- Chris Doering I have a decent 78 xe lots of potential
- Kat Laneaux Wonder if they will be able to be hacked into (the license plates) and then you get pulled over for invalid license plates or better yet, someone steal your car and transpose numbers to show that they are the owners. Just a food for thought.
- Tassos Government cheese for millionaires, while idiot Joe biden adds trillions to the debt.What a country (IT ONCE WAS!)
- Tassos screw the fat cat incompetents. Let them rot. No deal.
- MaintenanceCosts I think if there's one thing we can be sure of given Toyota's recent decisions it's that the strongest version of the next Camry will be a hybrid. Sadly, the buttery V6 is toast.A Camry with the Highlander/Sienna PSD powertrain would be basically competitive in the sedan market, with the slow death of V6 and big-turbo options. But for whatever reason it seems like that powertrain is capacity challenged. Not sure why, as there's nothing exotic in it.A Camry with the Hybrid Max powertrain would be bonkers, easily the fastest thing in segment. It would likewise be easy to build; again, there's nothing exotic in the Hybrid Max powertrain. (And Hybrid Max products don't seem to be all that constrained, so far.)