Elon Musk was charged with securities fraud by US regulators. (Reuters)
Elon Musk has reached a deal over fraud charges that will see him step down as electric automaker Tesla's chairman of the board and pay a $20 million fine, US securities regulators said Saturday.
"The settlements, which are subject to court approval, will result in comprehensive corporate governance and other reforms at Tesla — including Musk's removal as Chairman of the Tesla board — and the payment by Musk and Tesla of financial penalties" of $20 million each, the Securities and Exchange Commission said in a statement
Musk — who will remain CEO of Tesla — will be ineligible to serve as chairman of the board for a period of three years and will be replaced by an "independent chairman," while two "independent directors" will also be appointed by Tesla, the SEC said.
The SEC had charged Musk with securities fraud, alleging that he misled investors when he tweeted on August 7 that he had "funding secured" to privatize the electric automaker at $420 a share, causing a brief spike in Tesla's share price.
Things could ultimately have been significantly worse for Musk, as the SEC had sought to bar him from serving as an officer or board member of a publicly traded company.
The fraud case had piled fresh troubles on Tesla and Musk as the brash CEO, often praised as visionary, faces increased scrutiny over his volatile behavior that has included smoking marijuana during a podcast interview and assailing a man involved in the Thailand cave rescue as a "pedo guy."
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