Business

Musk, SEC seek judge’s OK on fraud settlement


And now, it’s in the judge’s hands.

Tesla Chief Executive Elon Musk and the Securities and Exchange Commission have submitted a joint letter dated October 10 to Judge Alison Nathan of the U.S. District Court for the Southern District of New York explaining why they believe Nathan should accept the terms of a deal to settle fraud charges the SEC brought against Musk in late September.

Nathan had given the parties until Thursday to tell her why she should approve their settlement terms. The agreement calls for Musk to step down as Tesla’s chairman for at least three years, Musk and Tesla to each pay a $20 million fine to the SEC and for Tesla to appoint two new independent board members.

Tesla will also set up a new board committee that will “oversee and preapprove Mr. Musk’s Tesla-related written communications that reasonably could contain information material to the company or its shareholders, and designation or employment of an experienced securities lawyer whose duties will include enforcement of those procedures.”

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Under terms of the agreement, Musk will neither admit, nor deny, the original fraud charges brought by the SEC, which stemmed from his tweeting on Aug. 7 that he had “funding secured” for a plan to take Tesla private for $420 a share. When it brought its original fraud charges, the SEC had sought to have Musk banned from running Tesla, or any publicly traded U.S. company.

Last week, Musk appeared to bite the SEC’s hand as he called the organization the “Shortseller Enrichment Commission” in a tweet that suggested he wasn’t going to tone down his controversial social media takes any time soon. That tweet sent Tesla’s stock price reeling 7 percent by the close of trading last Friday.

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Source:: The Mercury News – Business

      

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