NEW YORK (CNN Money) — Elon Musk agreed Saturday (Sept. 29) to step down as chairman of Tesla and pay a $20 million fine in a deal to settle charges brought this week by the Securities and Exchange Commission.
Under the settlement, which requires court approval, Musk will be allowed to stay as CEO, but must leave his role as chairman of the board within 45 days. He cannot seek reelection for three years, according to court filings.
He accepted the deal with the SEC “without admitting or denying the allegations of the complaint,” according to a court document.
The announcement from the SEC comes two days after the agency filed a lawsuit against Musk, claiming he misled investors. The suit centers on tweets Musk sent on August 7 in which he said he had secured funding to take Tesla private at $420 a share, causing the company’s stock to soar. He had not secured the funding, the SEC said.
Musk called the SEC’s suit “unjustified.”
“I have always taken action in the best interests of truth, transparency and investors,” he said. “Integrity is the most important value in my life and the facts will show I never compromised this in any way.”
The SEC’s lawsuit sought to ban Musk from serving as an officer or director of any publicly traded company.
CNBC, citing unnamed sources, reported that the agency filed the suit on Thursday (Sept, 27) after Musk refused an earlier settlement offer. Under that deal, Musk would have had to pay a “nominal fine” and leave his role as chairman for two years, according to the outlet.
Tesla did not immediately reply to CNN’s request for comment.
Separately, Tesla agreed Saturday to pay $20 million to settle claims it failed to adequately police Musk’s tweet.
The company also agreed to appoint two new independent directors to its board and establish a board committee to oversee Musk’s communications.
This is a breaking story and will be updated.
