Tesla CEO, Elon Musk, Steps Down Amid SEC Settlement

• Tesla CEO, Elon Musk, Steps Down Amid SEC Settlement

Following August tweets that erased investors’ profits, the Securities and Exchange Commission, SEC, has asked Elon Musk to give up his role as the chairman of Tesla Inc. and pay a fine of $20 million to settle fraud charges brought against him for claiming to have secured fund to take the company private.

Musk will keep his job as the Chief Executive Officer of the company and remain on the company’s board, but he is required to resign as chairman within 45 days and can not be the chairman of the company for at least three years.

Tesla was also fined $20 million, however, neither Tesla nor Musk admitted wrongdoing under the terms of the settlement, which was reached 48 hours after the SEC sued the billionaire over his false claim that some investors are willing to take the company private at $420 a share.

Tesla shares fell by 14 percent on Friday, the biggest of such drop in almost five years.

“This is a good resolution for Tesla stakeholders,” Ben Kallo, an analyst at Robert W. Baird & Co. with the equivalent of a buy rating on the shares, said in an email. “I expect the stock to trade materially higher on this and into the quarter where we can focus on the fundamentals.”

On August 7th, Musk in a tweet announced his plan to take the car company private and claimed to have secured the fund for it.