The man behind Tesla is now stepping down to his position as chairman of the company.
Elon Musk agreed Saturday to step down as chairman of Tesla and pay a $20 million fine in a deal to settle charges brought this week by the Securities and Exchange Commission.
Under the settlement, which requires court approval, he will be allowed to stay as CEO but must leave his role as chairman of the board within 45 days.
Musk cannot seek reelection for three years, according to court filings.
He accepted the deal with the SEC “without admitting or denying the allegations of the complaint,” according to a court document.
Separately, Tesla agreed Saturday to pay $20 million to settle claims it failed to adequately police Musk’s tweet.
“The $40 million in penalties will be distributed to harmed investors under a court-approved process,” the SEC said in a press release.
The company also agreed to appoint two new independent directors to its board and establish a board committee to oversee Musk’s communications.
Tesla refused to give comment.
Meanwhile, a spokesperson confirmed Musk will be permitted to remain a member of the board.
It can be remembered that the announcement from the SEC comes two days after the agency filed a lawsuit against Musk, claiming he misled investors.
The case focuses on tweets Musk sent on August 7 in which he said he had secured funding to take Tesla private at $420 a share, causing the company’s stock to soar.
He had not secured the funding, the SEC said.
The lawsuit sought to ban Musk from serving as an officer or director of any publicly traded company.
In response the decision Musk even called the SEC’s suit “unjustified.”
“I have always taken action in the best interests of truth, transparency and investors,” he said.
“Integrity is the most important value in my life and the facts will show I never compromised this in any way.”
Leaning on an expert point of view on the matter, Jay Dubow, a partner at Pepper Hamilton and a veteran of the SEC’s enforcement division, said it was “unusual” that the SEC agreed to let Musk stay on as chief executive but exit the chairman role.
It’s surprising considering “the conduct at issue, if [the SEC] really thought it was egregious,” Dubow said.
“The CEO is certainly more involved than the chairman in day-to-day operations.”