Elon Musk and Tesla settle fraud charges with SEC; to pay $40M fine

Embattled Tesla Inc (NASDAQ:TSLA) CEO Elon Musk has settled charges brought by the Securities and Exchange Commission stemming from a tweet last month claiming to have the funding to take the electric-car maker private.

According to the SEC, Musk will step down as chairman and pay a $20 million fine. The company will pay $20 million as well.

READ: Tesla faces criminal probe by US over Elon Musk’s statements on aborted go-private plan

Musk will remain in his role as CEO. He neither admits nor denies the allegations as part of the settlement. He will be ineligible for re-election to the board as chairman for three years.

The deal is subject to court approval, the SEC said.

In August, Musk tweeted that he was considering taking the company private at $420 per share and that he had “Funding secured.” The tweet sent shares on a wild ride.

Musk still faces a probe by federal prosecutors over the tweet.

Tela shares closed 13.9% lower to at $264.77 Friday.

Story by ProactiveInvestors