Elon Musk steps down as Tesla Chairman after Controversial Tweet

Elon Musk steps down as Tesla Chairman after Controversial Tweet

Avakian and Peikin demanded that Musk pay $20 million and be removed as Tesla's chairman for at least three years, harsher terms than were being offered in the scrapped deal, people familiar with the matter said. The appointment of two new Board members, as well as the creation of a committee tasked with "placing additional controls and procedures to oversee" Musk's communications, were warmly received by the Tesla community as well. The shares closed at $307.52 Thursday before the SEC announced its enforcement action over the tweets, in which Musk said he had "funding secured" to take the company private at $420 a share.

Shares of Tesla Inc (TSLA.O) jumped 18 percent on Monday as signs it had met targets for quarterly production numbers added to relief at Chief Executive Elon Musk's settling a lawsuit with regulators that could have forced him out.

The charges come after Musk claimed in August via a series of tweets that he was planning to take the electric auto maker private, and implied that such a move was imminent with "funding secured". Tesla itself has also been slapped with a $20 million fine by the SEC, making Musk's tweet one of the most expensive in history.

The SEC's lawsuit had sought to bar Musk from serving as an officer or director of a public company, a prospect that rattled investors.

Even after the stock's slide from last year's peak, Tesla is valued at $45.2 billion in the stock market.

In any case, the $40 million, which will be distributed to harmed shareholders after a court-approved process, are but a very small fraction of the more than $7 billion lost due to the whole debacle.

It ends a case that began in August, shortly after the publications made by Elon Musk and that ended up not having any progress, and the company maintained its position in the stock market.

"The resolution is meant to prevent further market disruption and harm to Tesla's shareholders", said SEC enforcement division co-director Steven Peikin.

"When companies and corporate insiders make statements, they must act responsibly", SEC Chairman Jay Clayton said.

Tesla did not immediately respond to requests for comment.

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.

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