Elon Musk to step down as Tesla chair after fraud lawsuit


Elon Musk is to step down as chairman of electric car-maker Tesla after settling a fraud lawsuit with US regulators.

The billionaire entrepreneur has been fined $20m (£15m) as part of the deal with the US securities and exchange commission (SEC), but will remain as Tesla’s chief executive.

He was sued by the SEC after being accused of making “false and misleading” tweets about potentially taking Tesla private.

He told his 22 million Twitter followers on 7 August that he might take Tesla private at $420 per share and that there was “funding secured”.

It prompted the SEC to file a lawsuit on Thursday for alleged securities fraud, saying Mr Musk had not discussed or confirmed key deal terms including price with any funding source.

Mr Musk’s tweets caused Tesla’s stock price to jump by more than 7% on 7 August and led to “significant market disruption”, the regulator said.

In response, Mr Musk called the lawsuit “unjustified” and said he was “deeply saddened and disappointed”.

Tesla CEO Elon Musk
Image: Musk said the SEC’s lawsuit was ‘unjustified’

Tesla’s share price plummeted by more than 10% the day after the legal action was announced, wiping more than $5bn from the company’s market value.

As part of his settlement, Mr Musk will step down as the company’s chairman and he will be ineligible for re-election for three years.

Mr Musk and Tesla will each pay a separate $20m (£15m) penalty, with the money distributed to “harmed investors”, the SEC said.

Tesla will also appoint two new independent directors to its board and put in place extra controls to oversee Mr Musk’s communications, the regulator added.

Steven Peikin, co-director of the SEC’s enforcement division, said: “The resolution is intended to prevent further market disruption and harm to Tesla’s shareholders.”

The SEC said Mr Musk and Tesla had agreed to settle the charges against them “without admitting or denying” the allegations.

Mr Musk, 47, is co-founder of Tesla and has served as chief executive since 2008.

More from Elon Musk

Separately, the billionaire is being sued by a British diver who helped rescue boys trapped in a Thai cave after the Tesla chief called him a paedophile.

Vernon Unsworth claims Mr Musk defamed him with “unlawful, unsupportable and reprehensible accusations”, according to court documents filed in California and seen by Sky News.

From – SkyNews


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