Tesla shares jump on Model 3 numbers, Musk settlement

Elon Musk to give up role of Tesla chairman

Tesla has turned to an army of volunteers to help it meet ambitious third quarter vehicle production targets after a bruising few days for chief executive Elon Musk, who was forced to pay $20m in order to settle a dispute with USA regulators.

Coming under pressure from his lawyers and investors of Tesla, tech billionaire Elon Musk has agreed to step down as chairman of the company for three years and pay a $20 million fine in a deal with the USA stock market regulatory authority, Securities and Exchange Commission (SEC), to resolve securities fraud charges.

Musk said that he had "funding secured" for a buyout of the electric-car company at $420 a share, reports The New York Times.

The SEC's lawsuit had sought to bar Musk from serving as an officer or director of a public company, a prospect that rattled investors.

The settlement stemmed from a lawsuit the SEC filed charging Musk with misleading investors in August with a tweet that said he had "funding secured" for taking the company private.




Avakian and Peikin demanded that Musk pay US$20 million and be removed as Tesla's chairman for at least three years, harsher terms than were being offered in the scrapped deal, people familiar with the matter said. Tesla will also be required to appoint two additional board members who are independent of Elon Musk.

In 2013, the company stated that it would use Musk's Twitter account as a means of announcing material information, however this has been diluted over the years by tweets of Musk's other firm, The Boring Company and various personal jokes. Achieving those milestones would be a rebuke to may on Wall Street who have insisted that Tesla would need to raise additional funds in the coming months.

Musk, 47, told employees in an email on Sunday that the company was "very close to achieving profitability and proving the naysayers wrong", but still needed to execute on the last day of the quarter.

Many see the forced changes as being positive for Tesla, partly because the mercurial Musk will now have someone to answer to, and partly because his reduced role may allow the chronically overworked CEO to focus more. Tesla has never reported a net profit and has been burning through cash since it was created in 2003.

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