Tesla CEO Elon Musk made a settlement with SEC (Securities and Exchange Commission) to resign as chairman of Tesla (the electric car maker company) and will pay a $20 million fine.
Elon Musk will no longer serve as Chairman of Tesla but he will remain CEO and keep a seat on the board.
According to the agreement which was filed Saturday, Musk will resign from his role as chairman of Tesla within 45 days. Under this agreement Musk also agreed to not accept an appointment as chairman for three years, now an independent chairman wiil be appointed for Tesla.
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.
Musk doesn’t have to admit or deny the SEC’s allegations as part of the agreement.
Tesla has also agreed to appoint two new independent directors to its board and establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications, according to the SEC. This likely means that Musk, who frequently turns to Twitter to unveils new products, features and updates on his multiple companies, will be more restricted moving forward. At least when it comes to his tweets about Tesla.
“The resolution is intended to prevent further market disruption and harm to Tesla’s shareholders,” Steven Peikin, co-director of the SEC’s Enforcement Division said in a statement.