By Conrad Malinowski
Elon Musk, co-founder of Silicon Valley-based energy and automotive giant Tesla, will step down as chairman of the company, but will remain Chief Executive Officer and a member on the board, according to The New York Times.
In a Sept. 29 agreement with the Securities Exchange Commission, it was concluded that Musk and Tesla must each pay $20 million in fines and that Musk must resign as chairman for three years in order to resolve the fraud charges that were brought against him, according to CNN.
The SEC brought on a lawsuit against Musk, which stemmed from tweets he made that misled investors, back in August.
The tweet he posted reads, “Am considering taking Tesla private at $420. Funding secured.”
Musk had not told shareholders, Tesla executives or the Securities Exchange Commission about taking the company private. This made the company’s stock soar, when in fact Musk had not secured the funding, according to CNN.
Two new independent directors will join Tesla’s board. All future written communications by Musk, including his tweets, will be monitored to prevent further conflicts of interest, according to CNN.
The $420 price point was a joke about marijuana between Musk and his then girlfriend, indie pop star Grimes, according to Business Insider.
As controversy continues to surge around Musk and Tesla, Bloomberg reports that the company hit its production goal for the new Model 3 sedan, the most crucial vehicle in the Tesla fleet for helping Musk reach his profit goal.