Elon Musk and his electric car company Tesla have agreed to pay a total of USD 40 million and make a series of concessions to resolve a claim by the US Securities and Exchange Commission (SEC).
The SEC announced the agreement reached on Saturday just two days after filing the complaint against Musk for fraud.
The agreement will require Musk to resign his role as president for at least three years, although he may remain as CEO, The company will pay USD 20 million and will add two new independent directors, while Musk will pay another 20.
The resolution on Saturday marks a quick resolution to a potentially devastating case for Musk.
The lawsuit against Musk and Tesla for fraud was made following a series of tweets by the company’s founder, published on August 7, in which he stated his intention to take the electric car manufacturer out of the market and said he had “secured “financing for the operation.
But the SEC said today that Musk knew that “the potential operation was uncertain and subject to numerous contingencies” and that he had not discussed the details of the operation, such as its price, with anyone.
It added that the Musk tweets caused the price of Tesla shares to increase by 6% on August 7 and caused a significant market disruption.