Elon Musk Fined USD 20 Million And To Step Down As Chairman Of Tesla For Misleading Investors With Infamous 'USD 420' Tweet
Tesla CEO Elon Musk (Photo Credit: PTI/File)

Washington, September 30: Elon Musk has been fined $20million and will also step down as chairman of Tesla after reaching a settlement on fraud charges. However, he will continue to stay on as CEO of the company. The Tesla Chairman was charged for spreading 'false and misleading information' on Twitter about taking his company private at $420 a share. Musk tweeted on August 7 about privatising Tesla which is a public traded company.

U.S. Securities and Exchange Commission (SEC) claimed that Musk's tweets had no factual basis and it created chaos in the stock market. SEC believed that it hurt the sentiments of the investors. In another tweet on the same day, Musk said that he had secured the funding and only needed a shareholders’ vote. According to reports, the Tesla Chairman’s tweet saw a stock jump of the company by more than six percent on August 7. But after SEC’s complaint, the share price crashed by 13 percent. Elon Musk Trolled on Twitter For Calling British Diver Who Helped in Thai Cave Boys Rescue a 'Pedo Guy'

According to SEC, Musk will be ineligible to serve as chairman of the board for a period of three years and will be replaced by an "independent chairman. In addition to this, two "independent directors" will also be appointed by Tesla. SEC has also asked the company to set up a new committee of independent directors and to check Musk's communications by placing additional controls. As per reports, $40 million will also be distributed amongst the investors who had suffered a loss due to Musk’s false information. However, the Tesla Chairman claimed that he had decided later against his proposed plan.