Breaking News

Shuttle announces DN11H at InfoComm 2025 Crucial announces T710 PCIe Gen5 NVMe SSD and X10 Portable SSD LIAN LI Presents Prototype Cases, AIO, and PSU Series at Computex 2025 CORSAIR at Computex 2025 ENDORFY introduces Celeris 1800 keyboard

logo

  • Share Us
    • Facebook
    • Twitter
  • Home
  • Home
  • News
  • Reviews
  • Essays
  • Forum
  • Legacy
  • About
    • Submit News

    • Contact Us
    • Privacy

    • Promotion
    • Advertise

    • RSS Feed
    • Site Map

Search form

Elon Musk Reaches Settlement With SEC, Resigns as Chairman

Elon Musk Reaches Settlement With SEC, Resigns as Chairman

Enterprise & IT Sep 30,2018 0

The Securities and Exchange Commission on Saturday announced that Elon Musk, CEO and Chairman of Tesla, Inc., has agreed to settle the securities fraud charge brought by the SEC against him last week.

The SEC also today charged Tesla with failing to have required disclosure controls and procedures relating to Musk's tweets, a charge that Tesla has agreed to settle. The settlements, which are subject to court approval, will result in corporate governance and other reforms at Tesla-including Musk's removal as Chairman of the Tesla board-and the payment by Musk and Tesla of financial penalties.

According to the SEC's complaint against him, Musk tweeted on August 7, 2018 that he could take Tesla private at $420 per share - a substantial premium to its trading price at the time - that funding for the transaction had been secured, and that the only remaining uncertainty was a shareholder vote. The SEC's complaint alleged that, in truth, Musk knew that the potential transaction was uncertain and subject to numerous contingencies. Musk had not discussed specific deal terms, including price, with any potential financing partners, and his statements about the possible transaction lacked an adequate basis in fact. According to the SEC's complaint, Musk's misleading tweets caused Tesla's stock price to jump by over six percent on August 7, and led to significant market disruption.

According to the SEC's complaint against Tesla, despite notifying the market in 2013 that it intended to use Musk's Twitter account as a means of announcing material information about Tesla and encouraging investors to review Musk's tweets, Tesla had no disclosure controls or procedures in place to determine whether Musk's tweets contained information required to be disclosed in Tesla's SEC filings. Nor did it have sufficient processes in place to that Musk's tweets were accurate or complete.

Musk and Tesla have agreed to settle the charges against them without admitting or denying the SEC's allegations. Among other relief, the settlements require that:

  • Musk will step down as Tesla's Chairman and be replaced by an independent Chairman. Musk will be ineligible to be re-elected Chairman for three years;
  • Tesla will appoint a total of two new independent directors to its board;
  • Tesla will establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk's communications;
  • Musk and Tesla will each pay a separate $20 million penalty. The $40 million in penalties will be distributed to harmed investors under a court-approved process.

Musk is required to step down as chairman of Tesla within 45 days, and he is not permitted to be re-elected to the post for three years.

Saturday's settlement saw the SEC pull back from its demand that Musk be barred from running Tesla, a sanction that many investors said would be disastrous for the loss-making electric carmaker.

Tags: tesla
Previous Post
Chinese Fabless Companies Give Chip Foundries More Business
Next Post
ITC Judge Found Apple Infringing Qualcomm's Patent But iPhones Won't Be Banned

Related Posts

  • Tesla Develops New Low-cost, Long-life Battery for Electric Cars: report

  • Tesla Sues California County in Virus Factory Closure Fight

  • Tesla Delays The Release of Roadster Sports Car

  • Tesla Applies For an Electricity Provider License in the U.K.: report

  • Tesla Reports Profit in Q1

  • Tesla Engineers Design Ventilator Prototype

  • Tesla Suspends Production at U.S. Car Factory

  • Sharp Sues Tesla Over Violation of Communication Tech Patents

Latest News

Shuttle announces DN11H at InfoComm 2025
Enterprise & IT

Shuttle announces DN11H at InfoComm 2025

Crucial announces T710 PCIe Gen5 NVMe SSD and X10 Portable SSD
Enterprise & IT

Crucial announces T710 PCIe Gen5 NVMe SSD and X10 Portable SSD

LIAN LI Presents Prototype Cases, AIO, and PSU Series at Computex 2025
Cooling Systems

LIAN LI Presents Prototype Cases, AIO, and PSU Series at Computex 2025

CORSAIR at Computex 2025
Cooling Systems

CORSAIR at Computex 2025

ENDORFY introduces Celeris 1800 keyboard
PC components

ENDORFY introduces Celeris 1800 keyboard

Popular Reviews

be quiet! Light Loop 360mm

be quiet! Light Loop 360mm

be quiet! Dark Mount Keyboard

be quiet! Dark Mount Keyboard

be quiet! Dark Rock 5

be quiet! Dark Rock 5

G.skill Trident Z5 Neo RGB DDR5-6000 64GB CL30

G.skill Trident Z5 Neo RGB DDR5-6000 64GB CL30

Arctic Liquid Freezer III 420 - 360

Arctic Liquid Freezer III 420 - 360

Crucial Pro OC 32GB DDR5-6000 CL36 White

Crucial Pro OC 32GB DDR5-6000 CL36 White

Crucial T705 2TB NVME White

Crucial T705 2TB NVME White

be quiet! Light Base 600 LX

be quiet! Light Base 600 LX

Main menu

  • Home
  • News
  • Reviews
  • Essays
  • Forum
  • Legacy
  • About
    • Submit News

    • Contact Us
    • Privacy

    • Promotion
    • Advertise

    • RSS Feed
    • Site Map
  • About
  • Privacy
  • Contact Us
  • Promotional Opportunities @ CdrInfo.com
  • Advertise on out site
  • Submit your News to our site
  • RSS Feed