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Elon Musk’s "Funding Secured" Tweet Just Cost Him & Tesla $40 Million

01 October, 2018, 17:26 | Author: Melinda Barton
  • Elon Musk to Resign as Chair of Tesla Board but Remain CEO

USA securities regulators settled a lawsuit against Musk alleging that he made false and misleading statements about plans to take the company private in August.

Tesla and Mr Musk will pay $20 million each to financial regulators.

Musk will remain Tesla CEO after settling SEC fraud charges over his infamous "funding secured" tweet about taking the auto firm private.

Musk will get to keep his job as chief executive officer and remain on the company's board, but must resign as chairman within 45 days and can't be re-elected to the role for three years as part of the accord reached Saturday with the Securities and Exchange Commission.

That caused a brief spike in Tesla's share price, leading so-called short-sellers, who have been betting on the stock crashing for years, to lose millions.

According to a report, Elon Musk has resigned as the chairman of Tesla.


He will stay on as chief executive of the company.

"The total package of remedies and relief announced today are specifically created to address the misconduct at issue by strengthening Tesla's corporate governance and oversight in order to protect investors", said Stephanie Avakian, the SEC's co-director of enforcement.

Musk, a co-founder of Tesla, is the company's largest stockholder, owning approximately 22 per cent of its outstanding shares.

The settlement requires that Tesla appoint two new independent directors and establish a committee of independent board members. With its meteoric rsie, Tesla has practically recovered the losses it incurred last week after the SEC announced that it was filing a lawsuit against Elon Musk over his "funding secured" Twitter announcement last August.

Analysts expect Wall Street will now be able to focus more on third quarter production numbers for the company's Model 3 sedan this week.

It revealed facts based on emails, documents and interviews that private lawyers haven't gained access to yet, giving them a better chance of withstanding Tesla and Musk's attempts to get the shareholder suits thrown out, legal experts said.

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