Musk agrees to step down as chairman of Tesla and a $20 million fine.

During the last week of September, CEO Elon Musk was sued by the Securities and Exchange Commission (SEC) for fraud.

This because the SEC said Musk was “false and misleading” in his August tweet that read:

“Am considering taking Tesla private at $420,” Musk said. “Funding secured.”

The SEC assured that Musk had not actually secured the funding at the time of the tweet. The agency said in its complaint:

“In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source.”

Agreement reached

Now, Musk has agreed to step down as chairman of Tesla and pay a $20 million fine in a deal to settle charges brought this week by the Securities and Exchange Commission.

According to court filings, Musk will be allowed to stay as CEO of Tesla, but he must leave his role as chairman of the board within 45 days. He will not be able to seek reelection for 3 years.

“The $40 million in penalties will be distributed to harmed investors under a court-approved process,” the SEC said in a press release.

A court document added Musk accepted the deal “without admitting or denying the allegations of the complaint”, however, Musk called the SEC’s suit “unjustified.”

He later stated: “I have always taken action in the best interests of truth, transparency and investors (…) Integrity is the most important value in my life and the facts will show I never compromised this in any way.”