Ilon Musk and Tesla settle legal disputes with the US Securities and Exchange Commission
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Tesla founder Ilon Mask agreed to pay a $ 20 million fine and leave the post of chairman of the board of directors as part of settling the lawsuit of the US Securities and Exchange Commission (SEC). Tesla will also pay an additional $ 20 million in fines and will agree to add two independent directors to its board, writes The Washington Post.
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Mask will leave the board of directors within 45 days and will be removed from this position within three years. However, he will retain the post of CEO of the company and is not obliged to admit guilt.
Musk committed this act 48 hours before the time limit on the lawsuit that threatened to plunge Tesla into unprecedented chaos.
“The legal protections and assistance applied today are specifically designed to solve problems related to Ilona Mask’s misdemeanor by strengthening corporate governance and oversight of Tesla in the interests of investors,” said Stephanie Avagian, a representative of the US Securities and Exchange Commission.
Tesla declined to comment on this settlement.
Responding to the SEC lawsuit at the beginning of the week, Musk said that the “unjustified action” of the SEC “left him deeply saddened and disappointed.”
“Honesty is what I value most in my life, and the facts will show that I have never compromised anyone,” he added.
The Mask, Tesla and SEC deal, announced on Saturday, was even more surprising because the SEC offered similar conditions last week after an investigation, which was unusually fast.
Musk sharply rejected the initial settlement proposal for this deal with the SEC earlier this week.
Meanwhile, Musk hired several high-ranking lawyers to prepare Tesla’s defense and fight for his career.
But Tesla's shares fell by more than 14 percent after a lawsuit with the SEC, reflecting the degree of risk associated with management.
It is unclear why Musk, who rarely retreats from battle, changed his mind.
Tesla's lawyer (Bradley Bondi from Cahill Gordon & Reindel) and Mask's lawyer (Stephen Farina from Williams & Connolly) made several night calls to the SEC trying to resolve this issue, according to a person close to the company but not authorized to talk about it .
The capitulation was “probably caused by pressure from investors,” says Michel Krebs, an executive analyst at Autotrader. Given the potential punishments they faced, if it came to court, "Mask and Tesla were lucky. ... However, reckless tweet cost a lot of money - the 20 millionth tweet."
In continuation of this post .
Mask will leave the board of directors within 45 days and will be removed from this position within three years. However, he will retain the post of CEO of the company and is not obliged to admit guilt.
Musk committed this act 48 hours before the time limit on the lawsuit that threatened to plunge Tesla into unprecedented chaos.
“The legal protections and assistance applied today are specifically designed to solve problems related to Ilona Mask’s misdemeanor by strengthening corporate governance and oversight of Tesla in the interests of investors,” said Stephanie Avagian, a representative of the US Securities and Exchange Commission.
Tesla declined to comment on this settlement.
Responding to the SEC lawsuit at the beginning of the week, Musk said that the “unjustified action” of the SEC “left him deeply saddened and disappointed.”
“Honesty is what I value most in my life, and the facts will show that I have never compromised anyone,” he added.
The Mask, Tesla and SEC deal, announced on Saturday, was even more surprising because the SEC offered similar conditions last week after an investigation, which was unusually fast.
Musk sharply rejected the initial settlement proposal for this deal with the SEC earlier this week.
Meanwhile, Musk hired several high-ranking lawyers to prepare Tesla’s defense and fight for his career.
But Tesla's shares fell by more than 14 percent after a lawsuit with the SEC, reflecting the degree of risk associated with management.
It is unclear why Musk, who rarely retreats from battle, changed his mind.
Tesla's lawyer (Bradley Bondi from Cahill Gordon & Reindel) and Mask's lawyer (Stephen Farina from Williams & Connolly) made several night calls to the SEC trying to resolve this issue, according to a person close to the company but not authorized to talk about it .
The capitulation was “probably caused by pressure from investors,” says Michel Krebs, an executive analyst at Autotrader. Given the potential punishments they faced, if it came to court, "Mask and Tesla were lucky. ... However, reckless tweet cost a lot of money - the 20 millionth tweet."