Game Is Over: Elon Musk Steps Down as Tesla Chairman and Pays $20M Fine in SEC Fraud Settlement

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Tesla CEO Elon Musk settles fraud charges with SEC for infamous ‘funding secured’ tweet – he must step down as Tesla chairman and pay $20 million fine.

Keep on reading Nexter.org to know more.

The game is over, Elon

Elon Musk has reached a settlement with the US Securities and Exchange Commission that will allow him to neither admit nor deny fraud charges, but which will have him step down as the company’s chairman for at least three years.

Also, Musk has to pay $20 million fine but expected to remain CEO.

The SEC had alleged that Musk knew at the time the potential transaction was “uncertain and subject to numerous contingencies.” The tweets caused Tesla’s stock price to jump by more than six percent shortly afterward, leading to “significant market disruption.”

Separately, Tesla agreed Saturday to pay $20 million to settle claims it failed to adequately police Musk’s tweet.

“The $40 million in penalties will be distributed to harmed investors under a court-approved process,” the SEC said in a press release.

As for today, Tesla shares are almost 14 percent down.

tesla-stock-price-down-pics

Source: BI

Ooop, someone’s in trouble? 

The U.S. Securities and Exchange Commission accused Tesla Inc. Chief Executive Elon Musk on Thursday of fraud and sought to remove him from his role in charge of the electric car company, saying he made a series of “false and misleading” tweets about potentially taking Tesla private last month.

In a lawsuit, the regulator described Musk surprising members of his own team and investors with a series of tweets, starting with the Aug. 7 announcement that he was thinking of taking Tesla private. Twelve minutes after the first tweet, Tesla’s head of investor relations texted Musk’s chief of staff to ask whether Musk’s announcement was “legit”, the SEC said.

Also, SEC alleged that Elon Musk chose a $420 price for possibly taking Tesla private because it is a marijuana culture reference that would “amuse” his girlfriend.

elon-musk-weed-pics

Source: Joe Rogan podcast

“We allege that Musk had arrived at the price of $420 by assuming a 20 percent premium of what Tesla’s then existing share price (was), and then rounding up to $420 because of the significance of that number in marijuana culture, and his belief that his girlfriend would be amused by it,” Steven Peikin, co-director of enforcement at the SEC, said during the conference.

Tesla shares tumbled 12 percent in after-hours trading.

Source: Reuters

Gene Munster, a managing partner at the venture capital firm Loup Ventures, said the SEC’s lawsuit against Musk, which alleges Musk made “false and misleading” statements in August about the possibility of taking Tesla private, will be “slightly disruptive” for Tesla in the next few months as the company seeks to stabilize its production and delivery infrastructures while beginning to deliver consistent profits.

“I think if this wasn’t happening, the company would be in a better place of hitting its goals for the December quarter and the March quarter of [20]19,” Munster said.


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Game Is Over: Elon Musk Steps Down as Tesla Chairman and Pays $20M Fine in SEC Fraud Settlement
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Game Is Over: Elon Musk Steps Down as Tesla Chairman and Pays $20M Fine in SEC Fraud Settlement
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Tesla CEO Elon Musk settles fraud charges with SEC for infamous 'funding secured' tweet - he must step down as Tesla chairman and pay $20 million fine.
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