September 29, 2018

Elon Musk and Tesla will pay a total of $40 Million in penalties to settle charges of securities fraud which were brought by the SEC against Musk one week ago and the charges made today against Tesla for failing to have the necessary disclosure controls and procedures in relation to the tweets of Elon Musk. One requirement of the settlement is Musk stepping down as Tesla’s Chairman. It will be three years before Musk can be re-elected as Chairman. Furthermore, there will be two new independent directors assigned to Tesla’s board and a new committee of independent directors who will put in place added controls and procedures to better manage Musk’s communications.  The payment of the $40 million will be made individually by Musk and Tesla – $20 million each. Finally, the investors who were affected will receive a distribution of the $40 million in penalties. SEC

Tagged in: Securities Fraud,