Elon resigns as Tesla chairman

According to the BBC, Elon Musk must resign as Tesla chair and pay a fine of £15m after making a deal with US regulators over tweets he posted about taking the firm private.

This announcement follows the decision made by the Securities and Exchange Commission (SEC) on the 27, September, to sue Elon for alleged securities fraud.

Elon will stay as Tesla’s CEO but must resign as chairman for three years, according to the deal. Elon and Tesla will have to the £15m fine.

‘This matter reaffirms an important principle embodied in our disclosure-based federal securities laws,’ said SEC chairman, Jay Clayton.

‘Specifically, when companies and corporate insiders make statements, they must act responsibly, including endeavouring to ensure the statements are not false or misleading and do not omit information a reasonable investor would consider important in making an investment decision.’

The fraud allegation comes from Elon’s tweet in August where he said that he was considering taking Tesla off the stock market and into private ownership. The SEC said the claims were ‘false and misleading.’

Elon originally replied to the charges stating they were ‘unjustified’ and that he behaved with the ‘best interests of truth, transparency and investors.’ Elon has 45 days to leave his job as Tesla’s chairman.

Under the deal Elon will be able to stay on as Tesla’s chief executive officer, which will limit his role within the company. An independent chairman will be appointed to Tesla.