Tesla CEO Elon Musk has reportedly accepted a deal with the SEC, two days after turning down the deal down, claiming initially that he could not “live with the idea.”
Elon Musk, the CEO of electric-car manufacturer Tesla, has reportedly reached a settlement with the SEC over charges of fraud relating to a tweet in which Musk claimed to have the “funding secured” to take Tesla private. Musk was offered a no-guilt settlement deal by the SEC, but pulled out of the agreement at the last minute. CNBC reported that under the terms of the deal Musk would be forced to pay a fine and he would be barred from acting as the chairman of Tesla for two years — although he would still maintain his role as CEO and he would not have to admit guilt in the matter.
Musk initially did not accept the deal because in doing so he would “not be truthful to himself,” and would not be able to “live with the idea that he agreed to accept a settlement and any blemish associated with that.” Now, it appears that the Tesla CEO has accepted the SEC deal. The Verge reports that under the agreements of the deal, Musk will be barred from acting as the chairman of Tesla but will continue to act as CEO. Tesla will also appoint two independent chairmen to the board.
Both Musk and Tesla will pay a $20 million fine to “be distributed to harmed investors under a court-approved process,” the SEC stated. Stephanie Avakian, co-director of the SEC’s enforcement division, said in a statement: “The total package of remedies and relief announced today are specifically designed to address the misconduct at issue by strengthening Tesla’s corporate governance and oversight in order to protect investors.”
As part of the agreement, Musk has agreed that he would not “admit nor deny” guilt in relation to the charges, something which was a huge issue for the CEO and a key factor in him walking away from the deal initially. The first hearing in relation to the SEC’s case against Musk was set to take place on Friday.
The Department of Justice is reportedly still investigating Tesla and a number of investors have sued Musk for alleged losses relating to market manipulation. Tesla also still faces lawsuits from investors claiming securities fraud.