Elon Musk steps down as Tesla chairman

Elon Musk is stepping down as chairman of Tesla under a settlement with the US stock watchdog SEC. He will remain as chief executive officer. The reason for the trouble with the SEC is Musk’s tweet in August about taking Tesla off the stock market.

In addition to stepping down as chairman of the board, both Musk and Tesla must pay $20 million to the SEC, which in turn will pass to shareholders harmed by Musk’s tweet in August. He then wrote “I am considering taking Tesla off the stock exchange for $420 a share. Financing is already in place”. The result of the ruling was a run on the automaker’s stock. Seventeen days later, Tesla indicated that it would not go public. The SEC, or securities and exchange commission, has labeled the statement “untrue and misleading.”

Musk has been banned from chairing the board for three years, but he will keep his place on the board. Tesla must also appoint two new, independent board members, but who they will be is not yet known. A new chairman of the board has not yet been announced. Finally, the settlement provides that Tesla will “establish mandatory procedures and controls to monitor all communications from Musk about Tesla, in whatever form.” That includes Twitter, Wired, among others, writes on the basis of court documents.

Despite the measures, Musk still has a lot of influence on the well-known car company, but this is still somewhat contained. After resigning, he can no longer schedule council meetings or determine what will be on the agenda.

According to Wired, Tesla is also under investigation by the American justice system on suspicion of fraud, because of the same tweet. In addition, there are the class-action lawsuits that shareholders have filed against Tesla. They are expected to continue despite the $40 million in compensation.