Elon Musk is resigning as the Chairman of Tesla in settlement with SEC

As the public face of Tesla, Elon Musk had gained legions of fans because of his bold approach to business as well as technology. For promoting the achievements of Tesla, the rocket launch company SpaceX, and all the projects including his tunnel venture, the Boring Co etc., Musk used his Twitter account to present everything to his nearly 23 million followers. Musk drove the company to the verge of profitability with a costly ramp-up of production over the past few years.

But after a fateful August tweet in which Musk speculated that he would take the company private, recently it has been announced that Elon Musk will resign as the chairman of the electric automaker. He will be resigning from the Tesla board within 45 days of time and will also be paying the commission a $20 billion as fine, however he will continue working as CEO of the company.

Because of the tweet, SEC filed a complaint in the federal district court on Thursday for lying by saying the funding secured for a private takeover of the company at $420 per share. Just a week after the tweet, the federal security regulators served Tesla with summoning.

The agreement that has been signed does not require Musk to admit or deny the SEC’s allegations. Two new independent directors have been agreed to be appointed to the board. a new committee of independent directors will also be established and put in place some of the additional control and procedures for overseeing Musk’s communications. As a result of this, Musk will be more restricted towards moving forward with his sharing of news with his followers on his Twitter account. According to Steven Peikin, the resolution is meant to stop further market disruption and harm to the Tesla’s shareholders.

Tesla diversified its board last year by including James Rupert Murdoch, the CEO of Twenty First Century Fox Inc. and Linda Johnson Rice, Chairman, and CEO of the Johnson Publishing Company. There were also other board members that were added such as Robyn Denholm in 2014 and Brad W. Buss in 2009, one of the longest-serving board members Antonio Gracias and Ira Ehrenpreis in 2007.

According to SEC, Musk has violated anti-fraud provisions of the federal security laws and the commission has asked the court to fine him. But Musk has described the fraud charges as an unjustified action and he is deeply saddened by the action that has been taken against him. Because of what has happened,

Musk will be barred from the Chairman position for three years but will remain the CEO of the company and can apply for Chairman again after 3 years.

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