Tesla shares jump after Musk settles with SEC

Elon Musk to Resign as Chair of Tesla Board but Remain CEO

Elon Musk to Resign as Chair of Tesla Board but Remain CEO

Musk will get to keep his job as chief executive officer and remain on the company's board, but must resign as chairman within 45 days and can't be re-elected to the role for three years as part of the accord reached Saturday with the Securities and Exchange Commission.

Shares of Tesla jumped almost 16% today after chief executive Elon Musk settled with the US Securities and Exchange Commission (SEC) over charges of misleading investors, heading off moves to force him out.

They also hoped the settlement would cap several months of volatility around Tesla's shares driven by a series of tweets and public pronouncements by Mr Musk.

The SEC, in a complaint to the court, claimed that Elon Musk had failed to abide by the anti-fraud provisions of the federal securities laws. Tesla will also pay a $20 million fine.

The SEC alleged in a lawsuit on Thursday that the tweets about financing for a go-private plan he abandoned just weeks later had no basis in fact, and said the market chaos that ensued hurt investors. The appointment of two new Board members, as well as the creation of a committee tasked with "placing additional controls and procedures to oversee" Musk's communications, were warmly received by the Tesla community as well.

Barbados on alert for Tropical Storm Kirk | Caribbean
Rainfall totals from four to six inches, with isolated totals up to 10 inches, are possible through Friday from Barbados and St. On the forecast track, the center will move over the Lesser Antilles within the Tropical Storm Warning area Thursday night.

Tesla jumped as much as 19% to $315.45 at 7:45 am NY time, more than enough to offset Friday's 14% plunge. Tesla had come under criticism for years prior to Musk's take-private episode for lax governance, though shareholders sided with the board in June by voting against an independent chairman proposal and approving the re-election of three directors.

Stephanie Avakian and Steve Peikin, co-directors of the SEC's Enforcement Division, led the talks, taking the reins from the staff attorneys who worked the case, according two people familiar with the matter.

Curiously, and as one of the parties to the deal, Elon Musk has accepted that he can never admit or deny that he has committed fraud, which in practice means he can never publicly state that he has done nothing wrong.

In the immediate aftermath of the "funding secured" tweet, Tesla stock rose by six per cent. Some analysts had said that Musk's departure would harm Tesla's brand, fundraising abilities and stakeholders' confidence if the company lost its key visionary.

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