He’s also had to pay a very, very large fine.
Elon Musk, that Twitter personality that also makes cars and sometimes solar panels, has been forced out of his chairmanship of Tesla as part of a settlement deal with the US Securities and Exchange Commission, which took issue with Musk’s tweets claiming intent to privatise Tesla. After SEC investigations revealed that Musk hadn’t had a lot of the specifics of the privatisation deal screwed down at the time of the tweet, the Commission felt that the “significant” market disruptions caused by it had to be answered for.
While Musk will remain as CEO of Tesla, he has also been slapped with a US$20-million fine (or about $27.6-million) in addition to stepping down as chairman of the company for three years. Tesla (the company) will also have to pony up US$20-million in fines related to this matter. This was part of a deal that Musk agreed to overnight, following the SEC filing a suit against Tesla on Friday.
“This [settlement] reaffirms an important principle embodied in our disclosure-based federal securities laws. Specifically, when companies and corporate insiders make statements, they must act responsibly, including endeavouring to ensure the statements are not false or misleading, and do not omit information a reasonable investor would consider important in making an investment decision. Holding individuals accountable is important, and an effective means of deterrence.” — Jay Clayton, Chairman, US Securities and Exchange Commission
“Corporate officers hold positions of trust in our markets, and have important responsibilities to shareholders. An officer’s celebrity status or reputation as a technological innovator does not give license to take those responsibilities lightly.” — Steve Peikin, Co-Director (Enforcement Division), US Securities and Exchange Commission
Musk said in an interview following the settlement that he feels the SEC’s actions against him are “unjustified,” and said that the terms of the settlement have left him “saddened and disappointed.” Since the SEC filed its suit against Musk and Tesla, the company’s stocks have dropped some 14% in value, so it’s clear that faith in the tweet-happy boss is dwindling.
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