Elon Musk Reportedly Walked Away From Settlement With Sec
Things are looking downright messy right now for Elon Musk and Tesla following a lawsuit by the Securities and Exchange Commission on Thursday accusing the CEO of securities fraud for his infamous “funding secured” tweet about taking the automaker private. Now come reports that say Musk turned down the opportunity to settle with the agency at the last minute.
The Wall Street Journal first reported the news, which was also confirmed by CNBC, citing unnamed sources. The network says Musk and Tesla would have had to pay a nominal fine and admit no guilt, but the proposed deal would have required him to step down as chairman for two years and forced Tesla to appoint two new independent directors. Tesla has not responded to the news about the proposed settlement with the SEC.
Musk reportedly refused to sign the deal at the last minute because he felt he would not be truthful to himself and wouldn’t have been able to live with the idea he’d agreed to accept a settlement and any associated blemish.
Musk has uncharacteristically been quiet on Twitter since his last tweet on Wednesday. On Thursday, he released a statement calling the SEC lawsuit “unjustified” and said, “I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way.”
But news of the lawsuit has sent Tesla’s shares tumbling — they were down nearly 12 percent as of this writing on Friday. Wall Street analysts are speculating that he may have to resign his position, adding that the electric carmaker could find it difficult to raise needed capital at affordable rates without him as the company’s figurehead and visionary.
In a statement, Tesla’s board of directors said it remained “fully confident in Elon, his integrity, and his leadership of the company, which has resulted in the most successful U.S. auto company in over a century.”