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In early August, Tesla CEO Elon Musk posted a fateful tweet: “Am considering taking Tesla private at $420. Funding secured.” On Saturday, two days after the US Securities and Exchange Commission filed a lawsuit against Tesla CEO Elon Musk for “false and misleading” statements made on Twitter, Musk, Tesla, and the feds reached a compromise—a settlement.
According to documents filed in a New York federal court, Musk and Tesla will have to each write $20 million checks for the misadventure, which will be disbursed to investors harmed during the wild market swings that occurred after Musk’s tweets. (Tesla announced in late August, 17 days after the tweet, that it would remain public.) The electric carmaker will appoint two additional independent members to its board. The company will have to keep firm oversight over Musk’s communications with investors—including by tweet. Most critically: Musk will have to step down from his role as Tesla chairperson for at least three years. He will remain on as the company’s CEO and will retain a seat on its board.