When the name Elon Musk is mentioned, two others tend to pop up in mind: Tesla Motors and SpaceX. The South African-born business magnate had established his prodigious entrepreneurial prowess in both the iconic electrical automaker and the private aerospace manufacturer and space transport service, among many other ventures such as tunneling service The Boring Company, solar energy provider SolarCity, and the Hyperloop vactrain project. But he is also rather infamous lately for problematic comments on social media. After the SEC filed a complaint accusing Musk of lying about having funds to privatize Tesla, the company CEO brokered a deal in return for stepping down.
TechCrunch reports that Elon Musk has entered into an agreement with the US Securities and Exchange Commission (SEC) this Saturday, September 29, wherein he will step down as chairman of Tesla, Inc. and pay a fine amounting to $20 million, all to avoid a potentially damaging legal battle over a complaint filed against him by the agency last Thursday, September 27. The SEC alleged that Musk’s Twitter post in August about securing funds for a private takeover of the publicly trading Tesla was false, which would have negatively affected him, the company and its shareholders.
In accordance with the terms of the settlement, Musk is no longer obliged to admit or deny the complaint against him. In return, he is expected to resign as chairman of Tesla within 45 days of the signed agreement, and that for the next three years he will not seek reelection to the role, nor accept if Tesla were to offer the chairmanship to him anew. The company must then appoint an independent chairman to take Musk’s place after the fact, though fortunately he will retain his position as Tesla CEO, along with his seat on the board of directors.
SEC Enforcement Division co-director Steven Peikin noted in a statement that the resolution will serve to keep both Tesla shareholders and the market from being adversely affected by the onset of legal proceedings against Elon Musk, who described the charges of fraud leveled against him for violating provisions of federal securities laws as “unjustified”. And while some shareholders are of the opinion that the change is welcome owing to the tight control Musk has over Tesla’s corporate governance, the company’s board and higher-ups have expressed support for their chairman and CEO in a joint statement.
This incident is but the latest in a long string of social media mess-ups committed by Musk recently. In July he made the news for getting into an online spat with the supervising officer of the effort to rescue the stranded junior football team in Tham Luang Cave, Thailand. His “pedophilia” comments caused public backlash.
Image from The Hollywood Reporter