United States judge approves settlement between SEC, Tesla and Musk

Todd Singleton
October 17, 2018

Tesla must also put in place a system for monitoring Musk's statements to the public about the company, whether on Twitter, blog posts, or any other medium.

Tesla's share price rose 4.5 per cent on the news in early trading. In the end, Musk and Tesla agreed to settle the charges "without admitting or denying the SEC's allegations".

A troubled Model 3 launch could heighten the risks for the company, while a steady delivery of Model 3s could generate a stream of cash that would allow Tesla to avoid going again to the capital markets to fund its operations. The deal also calls for a new chairman to be appointed, and the naming of two new independent directors.

One thing is for certain: If this isn't all an elaborate troll (which it might be!) Elon Musk's graphic design skills still need some work. Under terms of the settlement with the US regulators, Musk is not allowed to be re-elected as chairman for three years and Tesla has to appoint two new independent directors to its board.

After investigating Tesla during September for CEO Musk's use of Twitter, both the company and its flamboyant Chairman were found to have abused rules on investor communications. Shares fell more than 5 percent the following day.

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"The resolution is meant to prevent further market disruption and harm to Tesla's shareholders", Peikin had also added.

Tesla received over 450,000 reservations for its first mass-market electric vehicle since the company began taking deposits on March, 31 2016.

The stock dropped last month after the SEC accused Musk, 47, of fraud over his "false and misleading" tweets on August 7.

A longer-range version of the auto is priced at $44,000 and will drive 500km (310 miles) on a single charge.

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