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ASSOCIATED PRESS / SEPT. 17
The settlement will force Musk to step aside as chairman for three years and pay a $20 million fine.
Elon Musk, Tesla’s chief executive, reached a deal with the Securities and Exchange Commission today to resolve a securities fraud case. The settlement will force Musk to step aside as chairman for three years and pay a $20 million fine.
The terms are similar to ones that Musk had rejected Thursday, but slightly tougher.
The SEC announced the deal just two days after it sued Musk in federal court for fraud and misleading investors over his post on Twitter last month that he had “funding secured” for a buyout of the electric-car company at $420 a share.
It is not clear why Musk changed his mind and agreed to settle but shares of Tesla have been hit hard since the SEC filed the lawsuit. On Friday, the stock dropped about 13 percent.
The deal will allow him to remain as chief executive officer.
The deal that Musk rejected Thursday had a two-year bar on serving as chairman and a $10 million fine.
Tesla, which is also settling, will pay a $20 million penalty.
The company will add two independent directors and take steps to monitor Musk’s communications with investors.
In settling, Musk neither admits nor denies misleading investors under the civil fraud charge, which means he cannot later say he did nothing wrong. In settling, the company was not charged with any fraud.
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