Musk Sees "Victory" Tuesday, SEC Deal: Tesla Jumps


Although Musk, with the support of his company, claimed that he had done nothing wrong, the two have both stated that they will settle the allegations out of court without admitting or denying the allegations.

Tesla saw its stock price plunging after the SEC filed a lawsuit against Elon Musk over his now infamous "funding secured" tweet. The regulator decided that Musk "knew or was reckless in not knowing" about false information contained in his posts.

The California-based electric carmaker, emerging from several months of turmoil around its Chief Executive Elon Musk, confirmed numbers leaked to an industry news site on Monday that showed it produced roughly 80,000 cars in the third quarter.

Musk and Tesla will each pay $20 million under the settlement, the SEC said in a statement Saturday. As part of the settlement, Tesla will name two new, independent directors to its board.

In a follow-up company blog post issued August 13, Musk explained that his assertion of having "funding secured" was based on multiple encounters he had with the Saudi Arabian sovereign wealth fund, where he felt there was "no question that a deal with the Saudi sovereign fund could be closed".

The episode had increased scrutiny of the California-based company, which has struggled over the a year ago to boost output of its newest model. For one, the market for trading emissions credits-which has previously been Tesla's path to profitable quarters-has dried up.

Investors in electric auto maker Tesla were buoyed by news that Elon Musk will have to step down as chairman of the firm.

Under the agreement with the Securities and Exchange Commission (SEC), Musk and the company each will pay a $20m penalty, and Musk will be barred from serving as chairperson for at least three years.

SEC has also charged Tesla for failing to have the required disclosure control and procedures over Musk's tweets.

Tesla has been hustling to deliver Model 3 cars at the end of its financial third quarter.

So they sued him, dropping the company's stock by 14% (that's more than $7B in shareholder value) - Musk himself reportedly lost $1.6B in a single day.

The company has recently been struggling to meet audacious production goals for its Model 3 sedan.

Gore, also a well-known environmental activist who starred in the award-winning climate change documentary "An Inconvenient Truth", would indeed be seemingly aligned with Musk and Tesla's mission to put more electric cars on the road.