Elon Musk to Resign as Chairman of TESLA for 3 Years and Pay Fine for SEC Violations

[Eric The Tech Guru]

Source:

https://www.bloomberg.com/news/articles/2018-09-29/elon-musk-and-sec-reach-settlement-on-fraud-charges

 

Main Content:
 

Quote

Musk gets to keep his job as CEO but must resign within 45 days as chairman for three years, according to a statement released by Saturday by the regulator.

 

He’ll also have to pay a $20 million fine and have Tesla appoint two new independent directors. Tesla will pay another $20 million.

 

My take:

I think Tesla as a company will be fine and Elon will get some well needed rest from the crazy stuff he's been doing. He'll still have SpaceX and Boring Company so he won't get bored but I'm glad the SEC is taking steps to ensure the second largest car manufacturer in the US is under stable guidance and isn't crossing legal boundaries for memes...

I'm getting ready to buy some TSLA when it is on sale on Monday, but that's just me...

Because people are confused:
Elon remains CEO of Tesla, but is losing his title of Chairman

 

The Chairman of the Board of a company makes decisions regarding the direction the company is headed.

They "steer the ship" so to speak.

The CEO executes plans and handles operation of a company.
The CEO's job is to be guided by the board and execute their will in practical terms in the company.

 

Elon loses his big picture direction and decision making unilateral power, but he can still give feedback and persuade the board to do things he believes in.

He also still handles operations of the company and many administrative tasks for Tesla.

Additional Links:
https://www.washingtonpost.com/business/2018/09/29/teslas-elon-musk-settles-with-sec-paying-million-fine-resigning-board-chairman
https://www.theguardian.com/technology/2018/sep/29/elon-musk-tesla-40m-sec-case-tweets

https://finance.yahoo.com/news/tesla-musk-pay-40-mln-213220846.html

https://www.wsj.com/articles/elon-musk-can-remain-tesla-ceo-but-must-step-down-as-chairman-in-sec-settlement-1538257394

https://www.nytimes.com/2018/09/29/business/tesla-musk-sec-settlement.html

[ethawesomee]

OOF

[Brooksie359]

Was not expecting this. Damn I thought there wouldn't be hard enough evidence to prove anything. 

[dizmo]

He won't get bored?
I see what you did there.

 

It'll be interesting to see how Tesla does.

[PlayStation 2]

Womp womp

[Eric The Tech Guru]

Just now, Brooksie359 said:

Was not expecting this. Damn I thought there wouldn't be hard enough evidence to prove anything. 

The funniest part was if he had set the price to $419 they probably would have let him off the hook. The markup of 20% from TSLA's closing price the day before he tweeted (which he said was his reason for the pricing tweet) would have been $419 by the SEC's calculations but he bumped it to 420 for the meme.

[Ross Siggers]

There are two shocking things here. One, that they actually made it stick, I don't think many people saw that coming...

 

Two, are Tesla really the second biggest car manufacturer in the US? I find that hard to believe even after the big three needed bailing a few years back

[Eric The Tech Guru]

3 minutes ago, Ross Siggers said:

There are two shocking things here. One, that they actually made it stick, I don't think many people saw that coming...

 

Two, are Tesla really the second biggest car manufacturer in the US? I find that hard to believe even after the big three needed bailing a few years back

Yeah, Tesla is right behind GM in market cap, second largest US based and US owned auto manufacturer.

[LienusLateTips]

Uh.

[ItsMitch]

Time to buy Tesla stock!!!!!!!!!!!!!

[themaniac]

14 minutes ago, Eric The Tech Guru said:

 the second largest car manufacturer in the US 

shit seriously? would never have thought they would be in the top five at this time, who the hell are the others in the top 5 then

[Salv8 (sam)]

 

[asus killer]

fit punishment for manipulation stocks. Good riddance. Now he was to solve the problem of paying all the stock holders that lost money and are suing. 

[asus killer]

2 minutes ago, themaniac said:

shit seriously? would never have thought they would be in the top five at this time, who the hell are the others in the top 5 then

maybe market cap, it's impossible to be by units sold.

[Eric The Tech Guru]

7 minutes ago, themaniac said:

shit seriously? would never have thought they would be in the top five at this time, who the hell are the others in the top 5 then

 

Fiat Chrysler is at 26.811B right now.

[Sauron]

21 minutes ago, Brooksie359 said:

Was not expecting this. Damn I thought there wouldn't be hard enough evidence to prove anything. 

He settled, there was no trial. Evidence or not, they probably thought it wasn't worth fighting.

Quote

Neither Tesla nor Musk admitted wrongdoing under the settlement

This is not an admission of guilt or a sentencing, they basically said "we'll pay you $40M if you leave us alone".

[Guest]

7 minutes ago, themaniac said:

shit seriously? would never have thought they would be in the top five at this time, who the hell are the others in the top 5 then

I think because GM is one company now. Most companies are actually owned by others. 

 

10 minutes ago, Eric The Tech Guru said:

So as shown by this very nice chart, 

Toyota owns Lexus and Scion

Honda owns Acura

General Motors owns Cadilac, Chevrolet, Buick, Holden and GMC

Tesla owns no other companies

Ford owns Lincoln

Tata owns Jaguar, Land Rover (As well as Rover)

Kandi is a fairly new company that makes electric cars. 

 

On a side note, I'm surprised Fiat-Chrysler are not on the list -  as they own Abarth, Alfa Romeo, Fiat, Lancia, Maserati, Dodge, Jeep, Chrysler, Ram. 

[yolosnail]

You know, it really wouldn't surprise me if this was Elon's plan all the long. Maybe he wanted to step down but if he did, it would look bad on the company. So he devised a plan to get 'forced' out of the company, and that's why he settled even though he probably could have won the case if it went to trial.

With Elon out of the picture (well, he is still CEO), people might start to think of Tesla as a 'proper' car company 

[themaniac]

5 minutes ago, RorzNZ said:

I think because GM is one company now. Most companies are actually owned by others. 

 

So as shown by this very nice chart, 

Toyota owns Lexus and Scion

Honda owns Acura

General Motors owns Cadilac, Chevrolet, Buick, Holden and GMC

Tesla owns no other companies

Ford owns Lincoln

Tata owns Jaguar, Land Rover (As well as Rover)

Kandi is a fairly new company that makes electric cars. 

 

On a side note, I'm surprised Fiat-Chrysler are not on the list -  as they own Abarth, Alfa Romeo, Fiat, Lancia, Maserati, Dodge, Jeep, Chrysler, Ram. 

whether or not GM is one company im very surprised that Ford is worth less then GM. Seeing as Fiat Chrysler is worth 26B they really should be on there

[Guest]

2 minutes ago, themaniac said:

whether or not GM is one company im very surprised that Ford is worth less then GM. Seeing as Fiat Chrysler is worth 26B they really should be on there

Ford used to own Volvo, Aston and have large shares in other companies, but has regressed to only owning Lincoln. They still make great cars though, and the figures prove it. Overseas, especially NZ and AU (well - the markets I know at least!) Ford is pretty big and has a large base. It's mostly either Ford or Holden in Australia and Ford / Toyota in NZ. 

[suits]

40 minutes ago, SC2Mitch said:

Time to buy Tesla stock!!!!!!!!!!!!!

this lol

[rawrdaysgoby]

People keep saying no evidence... When he tweeted 420$ then said funding secured by someone in the mid east, People can keep their shares in the company.... They can see the price of the stock change literally as he said that... But then none of that was true... he is the chairmen and ceo of the company HE is the ONLY one that Shouldn't EVER lie about it..... That is plain market manipulation. 

[mr moose]

2 minutes ago, rawrdaysgoby said:

People keep saying no evidence... When he tweeted 420$ then said funding secured by someone in the mid east, People can keep their shares in the company.... They can see the price of the stock change literally as he said that... But then none of that was true... he is the chairmen and ceo of the company HE is the ONLY one that Shouldn't EVER lie about it..... That is plain market manipulation. 

have you got proof he lied? As far as I am aware there are no laws that determine how you must announce your plans for privatization. So long as you are not  lying.  

[vetali]

14 minutes ago, RorzNZ said:

They still make great cars though,

Not so much anymore, considering they only make one car in the states now.

 

Pretty light punishment honestly given how biased they are for the big 3. 

[Arika]

so a few things here

 

Quote

resign within 45 days as chairman for three years,

Does he automatically get put back into the Director's chair after the 3 years or does he need to be re-promoted by the board?

 

Quote

He’ll also have to pay a $20 million fine

oh nooooooooooooo