Elon Musk settlement with SEC approved by US judge
- Author: Terrell Bush Oct 17, 2018,
Oct 17, 2018, 17:12
Elon Musk is the public face of Tesla and losing him would be a big blow for the money-losing auto maker which has a market value of more than $50-M, chiefly because of the company's "cult" investors' belief in his leadership.
A troubled Model 3 launch could heighten the risks for the company, while a steady delivery of Model 3s could generate a stream of cash that would allow Tesla to avoid going again to the capital markets to fund its operations.
Tesla shares plunged the following trading day and closed down 5.1 percent on April 2.
The government lawsuit threatened Tesla and Musk with a long fight that could have undermined its operations and ability to raise capital.
Judge Alison Nathan of the U.S. District Court for the Southern District of NY approved a motion filed by the U.S. Securities and Exchange Commission outlining the agreement with Tesla and Musk.
"The resolution is meant to prevent further market disruption and harm to Tesla's shareholders", Peikin had also added.
The SEC had filed charges against Musk for securities fraud, over "false and misleading" tweets on 7 August which said he was considering taking the electric carmaker private at $420 per share with "funding secured".
"Just want to [say] that the Shortseller Enrichment Commission is doing incredible work".
The complaint was filed after Musk and Tesla's board abruptly walked away from an agreement with the SEC. "And the name change is so on point!" Experts said the tweet could be viewed, problematically, as a denial of wrongdoing by Musk, but they said it wasn't likely to derail the deal.
Tesla and Musk, the company's CEO, agreed to pay a total of $40 million in fines in the settlement Tuesday. Musk also posted a mock-up of roughly what the tequila bottle will look like. James Murdoch is rumoured to be his replacement. Musk called the report "incorrect".
But, it is hard to laugh it off entirely in case of Musk who joked about making a flamethrower once and actually did it, then he built a "kid-sized submarine" back in July which he wanted to use to rescue Thai football players from a flooded cave.