Ilon Mask and Tesla settle legal disputes with the US Securities and Exchange Commission
Tesla founder Ilon Mask agreed to pay a $ 20 million fine and resign as chairman of the board of directors as part of the settlement of the SEC's lawsuit. Also, Tesla will pay an additional $ 20 million in fine and agree to add two independent directors to its board, writes The Washington Post.
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Mask will leave the board of directors within 45 days and will be removed from this position for three years. At the same time, he will retain the post of CEO of the company and is not obliged to admit guilt.
Mask committed this act 48 hours before the time of the suit, which threatened to plunge Tesla into unprecedented chaos.
"The remedies and assistance used today are specifically designed to address the problems associated with Ilona Mask's misconduct by strengthening corporate governance and overseeing Tesla in the interests of investors," the US Securities and Exchange Commission representative Stephanie Avakyan said in a statement.
In the company Tesla declined to comment on this settlement.
Responding to the SEC's lawsuit earlier this week, Mask said that the "unjustified action" of the SEC "left him deeply saddened and disappointed."
"Integrity is the most important thing in my life, and the facts will show that I have never compromised anyone," he added.
The deal, Mask, Tesla and SEC, announced on Saturday, was even more surprising, as the SEC offered similar conditions last week after an investigation that was unusually fast.
Mask sharply rejected the initial settlement proposal for this deal with the SEC earlier this week.
Meanwhile, Musk hired several high-ranking lawyers to prepare for Tesla's defense and fight for his career.
But Tesla shares fell more than 14 percent after the lawsuit with the SEC, reflecting the degree of risk associated with management.
It is unclear why Mask, who rarely retreats from the fight, changed his mind.
The company's lawyers, Bradley Bondy of Cahill Gordon & Reindel and Mask attorney, Stephen Farina of Williams & Connolly, spent several night calls to the SEC trying to resolve the issue, according to a person close to the company, but not authorized to speak about it publicly.
The capitulation was "probably caused by pressure from investors," says Michelle Krebs, executive analyst at Autotrader. Given the potential penalties they faced, if it came to court, "Mask and Tesla were lucky Nevertheless, a reckless twist cost a lot of money - a 20 millionth tweet."
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