Washington, Sep 30 (IEBusiness) Elon Musk has agreed to step down as the Chairman of Tesla.
Musk’s decision is a unexpected resolution to a lawsuit filed by the Securities and Exchange Commission (SEC).
He has to pay a total of $US40 million to settle a US government lawsuit alleging that he duped investors with misleading statements about a proposed buyout of the company, a report in American commercial broadcast television network, ABC news said.
The Securities and Exchange Commission announced the settlement just two days after filing a case seeking to oust Musk as CEO.
However, the deal reached allows Musk to remain as chief executive.
Tesla’s stock dropped by 14 per cent on Friday after the SEC filed its lawsuit, erasing more than $7 billion in shareholder wealth.
The steep downturn in Tesla’s market value may have influenced Musk to have an apparent change of heart and negotiate a settlement.
Elon Musk and Tesla reached their settlement without admitting to or denying the SEC’s allegations.Elo