Tesla Needs a New Chairman to Replace Elon Musk After Judge Signs SEC Settlement
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The $40 million settlement between the Securities and Exchange Commission and Tesla Inc. (TSLA) - Get Report is now official after U.S. District Judge Alison Nathan signed the settlement in Manhattan, Tuesday, Oct. 16.
As part of the settlement, Musk will have to step down as chairman of the electric vehicle company and will have to personally pay a $20 million fine in addition to a separate $20 million fine levied against Tesla.
The court action comes in the wake of a tweet Musk sent on Aug. 7, suggesting that he had secured enough funding to take the company private at $420 a share. The company's shares jumped after the tweet was sent, leading to an investigation into market manipulation on the part of Musk.
It was reported that Musk originally threatened to step down as CEO of Tesla if its board forced him to accept the SEC's settlement, but he apparently reversed course and agreed to resolve the allegations without admitting or denying any wrongdoing.
There have been recent reports that James Murdoch, a director at Tesla and the CEO of Twenty-First Century Fox Inc. (FOXA) - Get Report , was being looked at as Musk's successor as chairman.
Tesla shares are rising 4.3% on Tuesday.