Elon Musk has agreed to step down as chairman of Tesla, after reaching a deal with the Securities and Exchange Commission.
Musk and Tesla will also have to pay a $20million fine (RM83 million), though he is allowed to continue as CEO.
The regulator filed a lawsuit against Musk last week, alleging a tweet in which he claimed he’d secured funding for a buyout of Tesla at $420 per share was “false and misleading”.
The Commission said Musk sent the tweet even though he “allegedly knew that the potential transaction was uncertain and subject to numerous contingencies,” causing “significant market disruption”.
It alleged the tweet, which Musk sent to his 22 million followers on August 7th, “created the misleading impression that taking Tesla private was subject only to Mr Musk choosing to do so and a shareholder vote,” when in fact “Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source.”
“As a result of Musk’s false and misleading statements and material omissions,” said the lawsuit, “investors who purchased Tesla stock in the period after the false and misleading statements but before accurate information was made known to the market were harmed.”
In a statement to CNBC, Musk called the allegations “unjustified”. He said: “I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way.”