Tesla and Musk submit to a settlement with SEC
New York: The US Securities and Exchange Commission, Tesla Inc and CEO Elon Musk submitted a joint filing in support of a settlement, saying the terms were in the best interest of investors.
“We therefore respectfully submit that the court should accept and enter the proposed consent judgements,” they said in a letter filed with the US District Court, Southern District of New York. Last week, a federal judge had ordered the SEC and Musk to justify their securities fraud settlement, which let Musk remain CEO, by October 11.
Musk agreed to pay a $20 million fine, and step aside as Tesla’s chairman for three years, to settle charges that could have forced his exit from Tesla. The company also accepted a $20 million fine, despite not being charged with fraud.
However, Musk appeared to mock the SEC on Twitter last Thursday (October 4), just hours after the court ordered him and the SEC to explain why their settlement was fair and reasonable.
“Just want to that the Shortseller Enrichment Commission is doing incredible work,” Musk, a frequent critic of investors betting against the electric car company, wrote. “And the name change is so on point!”
Meanwhile, Musk has denied a report that James Murdoch is poised to replace him as chairman, prolonging the uncertainty over leadership at the electric-car maker. Murdoch, the CEO of Twenty-First Century Fox Inc. and a Tesla board member, is the lead candidate for the job, the “Financial Times” had said. The newspaper is wrong, Musk tweeted in response, without elaborating.
The settlement with the SEC was reached two days after the regulator sued the billionaire over tweeted claims he had the funding and investor support to buy out stockholders at $420 a share. Musk got to keep his job as CEO and stay on the board, but has to relinquish the post of chairman and can’t be re-elected to the role for three years. Musk and Tesla were also each fined $20 million.
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