{"id":942,"date":"2018-09-29T06:54:36","date_gmt":"2018-09-29T06:54:36","guid":{"rendered":"https:\/\/www.antya.ca\/research\/tesla-inc-elon-musk-settles-sec-fraud-chargestesla-charged-with-and-resolves-securities-law-charge\/"},"modified":"2026-02-17T06:27:30","modified_gmt":"2026-02-17T06:27:30","slug":"tesla-inc-elon-musk-settles-sec-fraud-chargestesla-charged-with-and-resolves-securities-law-charge","status":"publish","type":"post","link":"https:\/\/www.antya.ca\/research\/tesla-inc-elon-musk-settles-sec-fraud-chargestesla-charged-with-and-resolves-securities-law-charge\/","title":{"rendered":"Tesla Inc.:Elon Musk Settles SEC Fraud Charges;Tesla Charged With and Resolves Securities Law Charge"},"content":{"rendered":"
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Settlement Requires Musk to Step Down as Tesla\u2019s Chairman; Tesla to Appoint Additional Independent Directors; Tesla and Musk Agree to Pay $40 million in Penalties.<\/p>\n

We were always of the view that Musk and Tesla would settle before going to trial.<\/p>\n<\/div><\/div>\n<\/div>\n

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THIS RELEASE HAS BEEN SOURCED FROM SEC.<\/strong><\/p>\n

The Securities and Exchange Commission announced today that Elon Musk, CEO and Chairman of Silicon Valley-based Tesla, Inc., has agreed to settle the securities fraud charge brought by the SEC against him last week. The SEC also today charged Tesla with failing to have required disclosure controls and procedures relating to Musk\u2019s tweets, a charge that Tesla has agreed to settle. The settlements, which are subject to court approval, will result in comprehensive corporate governance and other reforms at Tesla\u2014including Musk\u2019s removal as Chairman of the Tesla board\u2014and the payment by Musk and Tesla of financial penalties.<\/p>\n

According to the SEC\u2019s complaint against him, Musk tweeted on August 7, 2018, that he could take Tesla, private, at $420 per share \u2014 a substantial premium to its trading price at the time \u2014 that funding for the transaction had been secured, and that the only remaining uncertainty was a shareholder vote. The SEC\u2019s complaint alleged that, in truth, Musk knew that the potential transaction was uncertain and subject to numerous contingencies. Musk had not discussed specific deal terms, including price, with any potential financing partners, and his statements about the possible transaction lacked an adequate basis in fact. According to the SEC\u2019s complaint, Musk\u2019s misleading tweets caused Tesla\u2019s stock price to jump by over six percent on August 7 and led to significant market disruption.<\/p>\n

According to the SEC\u2019s complaint against Tesla, despite notifying the market in 2013 that it intended to use Musk\u2019s Twitter account as a means of announcing material information about Tesla and encouraging investors to review Musk\u2019s tweets, Tesla had no disclosure controls or procedures in place to determine whether Musk\u2019s tweets contained the information required to be disclosed in Tesla\u2019s SEC filings. Nor did it have sufficient processes in place to that Musk\u2019s tweets were accurate or complete.<\/p>\n

Musk and Tesla have agreed to settle the charges against them without admitting or denying the SEC\u2019s allegations. Among other relief, the settlements require that:<\/p>\n