Elon Musk, chief executive of Tesla agreed on Saturday to step down as chairman of the electric car maker he founded an unexpected resolution to a lawsuit filed by the Securities and Exchange Commission 48 hours earlier that threatened to throw Tesla into unprecedented chaos.
The SEC sued Musk on Thursday for allegedly lying to investors when he tweeted last month that he had “funding secured” to take Tesla private. It sought to ban the impulsive billionaire from serving as chief executive of any public company.
As part of the settlement, Musk will pay a $20 million fine. Tesla will separately pay another $20 million, add two new independent directors to its board, and monitor more closely Musk’s public communications — the source of many of the scandals that have roiled the ambitious but unprofitable company this year.
The conditions of the agreement “are specifically designed to address the misconduct at issue by strengthening Tesla’s corporate governance and oversight in order to protect investors,” Stephanie Avakian, co-director of the SEC’s Enforcement Division, said in a statement.
Musk and Tesla were not required to admit to any wrongdoing as part of the settlement. Tesla declined to comment on the settlement.