WASHINGTON (CN) — Elon Musk and Tesla will each pay $20 million to settle securities fraud charges, and Musk will resign as Tesla chairman for 3 years, for tweeting in August that he had the financing to take Tesla private for $420 a share, though he had nothing of the kind, the SEC announced Saturday.
Musk will not, however, be barred forever from running a publicly traded company, which the SEC demanded when it sued him for securities fraud last week.
Tesla will pay the $20 million for failing to have required disclosure controls and procedures relating to Musk’s tweets.
The settlements, subject to judicial approval, also require Tesla to appoint two new independent directors to its board and “establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications,” the SEC said in a statement announcing the settlement.
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