Elon Musk to resign as chair of Tesla board but remain CEO


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Tesla and its CEO Elon Musk have each agreed to pay a $20 million fine and make a series of concessions to settle a government lawsuit alleging Musk duped investors with misleading statements about a proposed buyout of the company.


The settlement allows Musk to remain CEO of the electric car company but requires him to relinquish his role as chairman for at least three years. Tesla must hire an independent chairman to oversee the company.


People view Tesla cars at a Tesla showroom center in Taipei, Taiwan on 27 August 2018.

In the settlement, the agency pulled back from its demand that Musk, who is synonymous with the Tesla brand, be barred from running Tesla, a sanction that many investors said would be disastrous.


“I think this is the best possible outcome for everyone involved” said Ivan Feinseth of Tigress Financial Partners, who rates Tesla ‘neutral’, who added the SEC’s penalty was only a slap on the wrist for Musk.


“The fact that he can remain CEO is very important for the company.”


The Securities and Exchange Commission announced the settlement on Saturday, just two days after filing a case seeking to oust Musk as CEO.


US Securities and Exchange Commission chairman Jay Clayton said that the agency’s settlement with carmaker Tesla was in the best interests of the US markets and company shareholders.


“I…fully support the settlements agreed today and believe that the prompt resolution of this matter…is in the best interests of our markets and our investors, including the shareholders of Tesla,” Clayton said.


Tesla share plummets after lawsuit announced


Musk, a billionaire, and Tesla, a company that ended June with $US2.2 billion in cash, each are paying $US20 million to resolve the case.


Elon Musk speaks at a news conference in Chicago.

The deal could remove one cloud that hangs over Tesla. Investors fretted about the company’s ability to cope without Musk, a charismatic entrepreneur whose penchant for coming up with revolutionary ideas as drawn comparisons to one of Silicon Valley’s most revered visionaries, Apple co-founder Steve Jobs.


Tesla’s stock plummeted 14 per cent on Friday after the SEC filed its lawsuit, erasing more than $US7 billion in shareholder wealth. Many analysts predicted the shares were bound to fall even further if Musk was forced to step down.


A file image of Elon Musk

The steep downturn in Tesla’s market value may have influenced Musk to have an apparent change of heart and negotiate a settlement. Musk had rejected a similar settlement offer before the SEC sued on Thursday, maintaining he had done nothing wrong when he posted an August 7 tweet declaring that he had secured the financing to lead a buyout of Tesla.


The SEC alleged Musk wasn’t close to locking up the estimated $US25 billion to $US50 billion needed to pull off the buyout.


Musk and Tesla reached their settlement without admitting to or denying the SEC’s allegations.


Article source: http://feedproxy.google.com/~r/sbsnews-topstories/~3/xTtfjANYino/nsw-residents-told-its-too-late-leave-out-control-fire-takes-hold-south-coast

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