Musk Was Wise to Settle With SEC, say Analysts

Two days after being charged with fraud by the SEC, Tesla founder Elon Musk settled with the US regulator, relinquishing the chairman's role and paying a fine

Dave Whiston 1 October, 2018 | 12:28PM

Tesla Elon Musk

Tesla (TSLA) shares crashed on Friday after news broke the previous night that founder Elon Musk had been charged with fraud by the US regulator, the Securities and Exchange Commission. Just a day later the SEC announced a settlement with Musk and Tesla that has seen the shares recover sharply in pre-market trading.

The agency charged Tesla with inadequate controls over Musk’s disclosures. Musk and Tesla will each pay a $20 million fine; Musk is barred from being Tesla’s chairman for three years; Tesla will add two new independent directors; and the company will establish controls over Musk’s communications. There is currently no word as to who will be the new independent chairman or new directors.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Tesla Inc403.40 USD4.03

About Author

Dave Whiston  is a guest author

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