In late September,
and the US Securities and Exchange Commission reached a settlement that prevented a lengthy court battle over alleged securities fraud. Now, that settlement has been given the green light to proceed.
US District Judge Alison Nathan has approved the settlement between Elon Musk and the SEC, Bloomberg reports. This was the last step required before the terms of the settlement could be executed, and Bloomberg notes that judicial approval was expected.
The details of the final settlement require Musk to step down as
chairman, a position he will not be allowed to hold for three years. An independent chairman will serve as Musk's replacement, and Tesla must also appoint two new independent directors. Elon Musk must also pay $20 million in fines, and Tesla must also pay $20 million.
The SEC and Musk had settled on different terms prior to the announcement of the SEC's lawsuit, but Musk's team reportedly backed out of the settlement, and the SEC filed suit shortly thereafter. The lawsuit recommended that Musk receive a lifetime ban from acting as an officer of a publicly traded company, but that language was softened in the subsequent settlement.
This whole kerfuffle began with two simple words: "Funding secured." A tweet from Musk that he was considering taking Tesla private, and had allegedly secured the funding to do so. This launched an SEC investigation into whether or not the funding actually was in place, because if it wasn't, it could be legally troublesome. In the following days, Musk reversed his position, eventually deciding to leave Tesla public for a variety of reasons.
Musk's legal troubles don't end with the SEC, though. The Department of Justice is reportedly looking into the matter, as well. While the SEC only covers civil penalties, a lawsuit from the DOJ could result in potential criminal charges.