Musk ousted as Tesla chairman, fined $40 million in SEC settlement over fraud charges; will remain CEO

“Elon Musk will relinquish the role of Tesla Inc. chairman and split a $40 million penalty with the electric-car maker to settle fraud charges brought by the U.S. over his tweeted claims about taking the company private,” Dana Hull reports for Bloomberg. “Musk, 47, will get to keep his job as chief executive officer but must resign as chairman within 45 days and can’t be re-elected to the role for three years, the Securities and Exchange Commission said Saturday.”

“Neither Tesla nor Musk admitted wrongdoing under the settlement, which was reached two days after the SEC sued the billionaire over his tweeted claims to have had the funding and investor support to buy out stockholders at $420 a share,” Hull reports. “The settlement requires that Tesla appoint two new independent directors and establish a committee of independent board members.”

Read more in the full article here.

MacDailyNews Take: $40 million and loss of Chairmanship is an admission of wrongdoing, regardless of the legalese bullshit.

In other words: If Musk did nothing wrong, he’d still be Chairman, he and Tesla wouldn’t each be $20 million lighter in the wallet (not that they’ll notice), and the company wouldn’t be appointing two new independent directors and establishing a committee of independent board members.

Tweets can be mighty expensive.

SEE ALSO:
U.S. SEC charges Tesla CEO Elon Musk with fraud – September 27, 2018
Tesla shares crash after Elon Musk smokes pot on live web show, exhibits other bizarre behavior – September 8, 2016
Apple hired scores of ex-Tesla employees this year, and not just for its car project – August 24, 2018
Tesla sinks on concerns over CEO Elon Musk’s erratic behavior – August 17, 2018
Doug Field, former Tesla engineering chief, returns to Apple – August 10, 2018

32 Comments

        1. Indeed. Stock is up sharply in early morning trading. I love Tesla (and Apple), but Elon dodged a bullet on this one. I’m glad he settled and I’m glad for the other corporate governance changes required by the SEC settlement. Anyone as overworked as he is is liable to make mistakes and no doubt he got ahead of himself on Twitter and will new be more reigned in. Only good things can come of that. It’s a huge relief that this threat to the company is over with.

      1. Elon should be charged with insider trading /s, since he owns over 20% of Tesla’s shares.

        It’s up 16% today, over $7B, and over 20% is Elon’s. The $40M is paid with a ton of change left over.

  1. MDN take is wrong and petty. First, let’s be blunt. Steve Jobs backdated options. If he didn’t have his Al Gore get out of jail free card, he’d be under the bus with others he threw there.

    SEC ignores fund/press long term manipulation (this over 10yrs old https://www.youtube.com/watch?v=gMShFx5rThI) while protecting ebook monopolist amazon and punish apple who was a new entrant and sold all of $3 of ebooks.

    They hurt investors/companies for personal headlines.

    Of course MDN wants it both ways. Against apple, the SEC is evil and rotten, but since the MDN guys have some petty vice against Elon, theyre ok with it. When Steve Jobs “broke” some bs accounting rule on backdating that was fine for decades that the SEC had him dead to rights as violating, and when Al gore went and hand massaged the SEC over it, well that’s ok.

    The reality is, the govt and SEC in particular are horrors and ruing and make everything they touch worse. They’re with the government, and they are there to help…

    1. I’m guessing, based on this comment, this is Musk or someone who is invested somehow in the company. At no point did SJ go on twitter or any media outlet and claim false and misleading information just to get back at short seller. If this is Musk, you know you did. It this is an investor, you are ignoring the obvious.

        1. You mean me?

          Ha! I’ve owned Tesla shares for only 15 secs.

          I bought 200shs right at market close on Friday. Had to do something with that cash since my Model 3 wasn’t ready. Will sell after the pop, and make my purchase a little cheaper.

          1. Well, what I remember is your postings you owned Tesla shares and bought one and love it, the acceleration and how quiet on the road. That’s why you are cheerleading for the stock, no? I don’t recall you saying you owned the shares for 15 seconds. Guessing it takes longer to make the purchase and make the sale.

            That said, will admit memories can fade over time…

            1. You are totally confusing me with someone else. I’ve never owned Tesla shares. It’s way overvalued. I’ve never encouraged anyone to buy the shares. I do have an order for the Model 3. Love the car, dislike the shares, and dislike Elon. I’m the person who wrote that Elon was nothing like Steve Jobs, when there was an MDN article promoting the idea that Elon is the next Steve.

              I only pointed out the obvious, that now that Elon has agreed to the SEC fine, etc., the stock will likely rebound on Monday. That’s not going out on a limb, that’s what you would expect.

              As I said, I bought the shares literally with less than 15secs to go on Friday. Here’s a dropbox link to a screenshot I took of my order fill. Note the time, was 3:59p et. Too bad they don’t show seconds.

              I bought shares not as an investment, but because I literally was supposed to get my car this weekend, but it got delayed, so I had over $50k to invest short-term. I felt Tesla was oversold on Friday, and that the odds of a settlement over the weekend were high, so I bought at the close, with the intent to sell shortly after the quarter’s production report, which should come out Monday or Tuesday. Knowing how Elon works, and knowing how hard Tesla worked to get cars into owner’s hands this week, just not mine, I had a strong feeling that Tesla met its production targets this quarter. Both of those things made me confident that Tesla should have a nice pop Monday and Tuesday.

              Would I recommend Tesla as an investment? Absolutely not.

    1. Maybe not. If I were short Tesla when this happened and had to cover at a loss, I would sue his butt. It seems there are many times Musk doesn’t consider his fiduciary duty.

        1. Sometimes I find you tremendously sad, GoeB. I love that you’re a right wing Trump supporter, I am too, but you need to lighten up.

          I’m not “Banned Citizen X” – no idea who that is, but I’ve seen you refer to him or her, and you didn’t even pick that up with the BCX thing.

          Come on, GoeB, go be a person who has more fun 🙂

          #MAGA

    1. The Mac news is that MDN commenters’ preferred replacement for Apple’s much-maligned CEO Tim Cook will no longer be Elon Musk. Who’s next up? I nominate Sheryl Sandberg.

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