Following a campaign by investors to reform the board of Tesla, controversial boss Elon Musk has been forced to step down as the Chairman of the company.
An investigation was launched by the Securities and Exchange commission (SEC) in August following Elon Musk’s tweet about taking the company private and he told the world that “funding was secured.”
He tweeted two months ago that he was prepared to sell the company to a private owner “announcing” a $420-a-share takeover price for the company. When first questioned by the company, he Musk confessed that he had settled on the $420 figure to impress his girlfriend. At the time, Musk was dating the pop singer Grimes.
He was then charged to court by the SEC. Just two days later, the billionaire reached an agreement with the SEC.
He must step down as the Chairman of Tesla within the next 45 days. He will not be able to take that role with the company again for three years.
However, he will be able to remain Tesla’s CEO during that time. Elon Musk who has been in numerous scandal in recent times including smoking weed on live show was charged with SEC’s allegations that he committed fraud by misleading his investors.
Not only must he step down as chairman, fine must be paid. He and the company must pay $20 million fine each to the investors.
All his investors were harmed as a result of his “stupid joke” to please his girlfriend.
While Musk reportedly had held multiple meetings with Saudi Arabia’s sovereign wealth fund about backing the privatization effort, the SEC argued in its lawsuit that Musk did not have a deal in place.
Therefore his tweets were therefore “false and misleading” to investors and the general public.
The charge against Elon Musk
“Musk knew that he had never discussed a going-private transaction at $420 per share with any potential funding source.
He did nothing to investigate if all investors will remain with Tesla as a private company.
He had not confirmed support of Tesla’s investors for a potential going- private transaction,” the agency wrote in its complaint.
Elon Musk was equally sued by a number of shareholders in court for losses resulting from the alleged market manipulation.
Now he’s going to cough up $20 million from his pocket and from the company’s account to settle his investors. A high price to pay for making stupid jokes, I wonder what his “girlfriend” will thinks of him.