Tesla’s CEO Elon Musk agreed to step down as the automaker’s Chairman in a settlement with the US Securities and Exchange Commission (SEC). Musk needs to pay a $20 million fine. However, he is still allowed to remain in the position of Tesla’s CEO. Musk doesn’t have to admit or deny the SEC’s allegations as part of the agreement.
Tesla will pay a separate $20 million penalty, according to the SEC. The SEC said the charge and fine against Tesla is for failing to require disclosure controls and procedures relating to Musk’s tweets. Tesla agreed to appoint two independent directors to the board. The company will also establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications.
SEC claimed Musk misled the investors when he announced on Twitter at the beginning of August that he had funds for a buyout of the electric-car company at $420 per share (about $273 on Friday).