Elon Musk resigning as Tesla chairman after ‘false and misleading’ tweets

Founder and CEO of Tesla Motors Elon Musk speaks during a media tour of the Tesla Gigafactory. (File photo: Reuters)

Elon Musk has reached a settlement over fraud charges that will see him step down as Tesla’s chairman of the board and pay a $20 million fine, US securities regulators said Saturday.

Musk will however remain the CEO of the electric automaker, which will also pay a $20 million fine under the settlement, which is subject to court approval, the Securities and Exchange Commission said.

The SEC had charged Musk with securities fraud, alleging that he misled investors when he tweeted on August 7 that he had “funding secured” to privatize the electric automaker at $420 a share, causing a brief spike in Tesla’s share price.

Things could ultimately have been significantly worse for Musk, as the SEC had sought to bar him from serving as an officer or board member of a publicly traded company.

The fraud case had piled fresh troubles on Tesla and Musk as the brash CEO, often praised as visionary, faces increased scrutiny over his volatile behavior that has included smoking marijuana during a podcast interview and assailing a man involved in the Thailand cave rescue as a “pedo guy.”

Last Update: 07:29 KSA 10:29 - GMT 07:29