Elon Musk has been forced to step down from his role as the Chairman of Tesla, amid a US investigation for alleged securities fraud.
Back in August, he tweeted that he had secured funding to take the company private, which caused a massive fluctuation in Tesla share prices. As we reported on Friday, the U.S. Securities and Exchange Commission (SEC) said that Musk has organised no such deal, or even started talking about it. The SEC called the claims “false and misleading.”
“In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source,” the regulator added.
Not even senior Tesla employees knew about any attempt to take the company private.
It was expected that Musk would be banned from being a board member of any public company for three years, but the entrepreneur has reached a deal that will allow him to remain as Tesla’s CEO. That means he will still oversee the day-to-day running of the company, but an independent chairperson will be introduced to take charge of the boardroom.
Both Musk and Tesla have been ordered to pay a $20 million (£15 million) fine.
The move should limit Musk’s power in Tesla somewhat but, given the circumstances, many analysts suggest that he has got off lightly. The report insinuates that after the three-year period, Musk may be allowed to return to his position.
This case could have serious consequences for his positions in SpaceX and PayPal, too. It is the latest event in a year to forget for Musk – he is currently being sued by British cave diver Vern Unsworth, and was criticised recently for smoking marijuana on a podcast with Joe Rogan. Although legal where the video was filmed, Tesla’s shares dropped nine per cent as a result.