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Elon Musk Resigns As Chairman Of Telsa

Elon Musk Resigns As Chairman Of Telsa

In case you haven't been paying attention to the news, Tesla's sort of going through a rough patch at the moment: The electric vehicle manufacturer's founder, Elon Musk, now has the US Securities and Exchange Commission breathing down his neck, and it's safe to say that the company's seen better days.

Musk has agreed to pay out the $20 million fine.

Shares of Tesla Inc jumped almost 15 percent on Monday after Chief Executive Elon Musk settled a lawsuit from the US Securities and Exchange Commission (SEC) that sought to remove him from company management.

The news of Tesla CEO Elon Musk settling with US financial regulators sent the company's stock soaring Monday morning.

After filing the lawsuit, SEC officials were anticipating a drawn-out legal battle, but settlement talks started up again late Friday after Musk's attorney Steven Farina sent an email asking to reopen the discussions.

Last week, the government charged Musk with making "false and misleading statements" to investors on his Twitter account when he said he had secured funding to take the company private.

The Securities and Exchange Commission (SEC) sued the billionaire and all parties reached an agreement on Saturday night.




Besides the settlement news, Tesla has another milestone this week.

Tesla will now be appointing two new independent directors to its board. In addition to this punishment, Elon Musk and Tesla are required to pay a fine of $20 million each.

Musk, whose tweets on August 7 on a plan to take Tesla private that was later abandoned, has tweeted only once since the settlement was announced - posting a music video by rap group Naughty by Nature.

In emails leaked to CNBC, Musk hinted that Tesla was "very close" to being profitable and told staff to "ignore the distractions".

Tesla did not immediately respond to a request for comment.

According to analysts, the settlement is probably the best thing for both the SEC and Musk and Tesla, because the SEC is showing it can act to enforce change in protecting shareholders, while Musk-removed as chairman-will keep its CEO role at Tesla: a role analysts and Tesla believers see as crucial for the company.

Tesla is also under heavy pressure to turn a profit because it is burning through $1 billion in cash every three months and, as of the end of June, had just $2.2 billion in the bank.

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