ICYMI, Elon Musk is stepping down as the chairman of Tesla and being made to pay a fine of $20 million (£15 million). Youch, right?
It followed a decision made by US financial markets regulator, the Securities and Exchange Commission (SEC), on September 27, to sue Musk on charges of alleged securities fraud.
The decision stems from a tweet made by the billionaire business magnate on August 7, which falsely suggested he’d secured financing to privatise Tesla for a price of $420 per share.
It’s said to have led to Tesla’s stock price soaring by over six per cent the same day, causing a huge market disruption. The subsequent securities fraud complaint led to shares dropping by over 13 per cent in after-hours trading, AKA pretty bad for the Musk.
The 47-year-old will remain as chief executive officer (CEO) of Tesla, but must now step down from his position of chairman for a three-year period.
Tesla will also have to pay a separate $20 million fine for failing to have had preventative disclosure controls and procedures in place.
Today (October 1), the Musk made a return to social media to let us know he really doesn’t care about the controversy – whether it be calling everyday heroes paedophiles, smoking blunts on The Joe Rogan Experience or sharing O.P.P’s ‘Naughty by Nature’ to his 22.8 million Twitter followers.
That’s just how he rolls, baby!
His original blunder tweet was made after he’d met with Saudi investors who’d shown interest in Tesla. However, it quickly emerged a deal had not been guaranteed. In the weeks following the tweet, Tesla confirmed they’d be remaining a public company.
SEC chairman, Jay Clayton, made the following statement on the matter:
This past Thursday, after the completion of a thorough investigation and following dialogue with representatives of Mr. Musk and Tesla, the Commission filed an action against Mr. Musk in federal district court. I fully supported the filing of the action.
I also fully support the settlements agreed today and believe that the prompt resolution of this matter on the agreed terms, including the addition of two independent directors to the Tesla board and the other governance enhancements at Tesla, is in the best interests of our markets and our investors, including the shareholders of Tesla.
This matter reaffirms an important principle embodied in our disclosure-based federal securities laws. Specifically, when companies and corporate insiders make statements, they must act responsibly, including endeavouring to ensure the statements are not false or misleading and do not omit information a reasonable investor would consider important in making an investment decision.
Musk now has 45 days to step down as chairman, with a new independent chairman for Tesla set to be appointed.
Truly wild times we live in.
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