Musk agreed to relinquish the role of chairman for at least three years and pay $20 million to settle fraud charges that the US Securities and Exchange Commission brought against him in a lawsuit filed Thursday.
According to a report, Elon Musk has resigned as the chairman of Tesla. A more assertive board could provide the kind of tighter oversight that many legal experts, and Tesla investors, say is overdue for a company of Tesla's market value.
The SEC's complaint alleged that Musk had made "false and misleading" statements, with Tesla's share price having risen on the back of Musk's tweet. He and Tesla will pay $20 million each, and the company will have to find an independent chairman to replace Musk, who will stay on as CEO.
In any case, the $40 million, which will be distributed to harmed shareholders after a court-approved process, are but a very small fraction of the more than $7 billion lost due to the whole debacle. "The resolution is meant to prevent further market disruption and harm to Tesla's shareholders", said SEC enforcement division co-director Steven Peikin. The SEC charged Tesla with failing to have required disclosure controls and procedures for Musk's tweets. Musk did not found Tesla but provided early financing.