Elon Musk was accused by the Securities and Exchange Commission for misleading Tesla investors/the public with false statements. His charges include 20 million dollars from his own personal money, and 20 million dollars from Tesla’s money. This deal doesn’t require Musk to admit, or deny guilt. Also as part of this deal, Elon has to quit as Tesla chairman this November and cannot try to be re-elected for three years. For the first time Musk will have to report to someone. Lastly, Tesla will receive new governance rules and twMusko more directors. Musk can still have a seat on the board and will remain CEO.
On August 7th, 2018, Elon Musk tweeted about taking Tesla private at $420 a share, and that funding was secure. As an result of this tweet, Tesla shares went flying up by 9%. It later then became evident that the funding wasn’t secured, and the plan was dropped on August 25th. Later the federal government proved this was a false statement and a blatant lie.
Then the S.E.C decided to file a complaint against Musk in federal court, and Tesla stocks then plunged by more than 13%. Tesla has now lost its visionary chairman. Musk, however, is making it clear that he still is the main voice and opinion at Tesla.
Tesla is defying the odds again. Right after the case was settled Tesla shares went flying up again, almost by 17%. When the Securities and Exchange Commission charged Musk with fraud, their main goal was to put down Tesla’s leadership. However, the opposite has happened.
The S.E.Cs actions against Musk is what Tesla needs. At Space X, (another company Musk is the CEO of) Elon has a person to oversee the company’s operations. However, this wasn’t the case at Tesla. “Tesla Watchers” (people that follow Tesla and predict stats for Tesla) have been asking now for a while to have someone to control Musk. By the S.E.C adding two new independent directors, they are helping Tesla. This is the best thing that could have happened to Tesla.