Elon Musk to Resign as Chair of Tesla Board but Remain CEO

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The SEC said Musk's statements on Twitter were "false and misleading" and that he had never discussed the plans with company officials or potential funders. As part of the deal, Musk and Tesla will also both pay $20 million, while the former will neither admit nor deny the allegations.

The $40 million in financial penalties "will be distributed to harmed investors under a court-approved process".

Elon Musk told Tesla employees that the company was on the cusp of making money, hours after he and the carmaker reached a settlement with the USA that steps up oversight of the chief executive officer's communications of material information.

Musk will get to keep his job as chief executive officer and remain on the company's board, but must resign as chairman within 45 days and can't be re-elected to the role for three years as part of the accord reached Saturday with the Securities and Exchange Commission. Musk said August 7 in a company blog post that he was considering taking Tesla private at $420 per share, representing a 20% premium over the stock price following the company's second-quarter earnings release. The SEC's lawsuit charged that the tweet, which caused Tesla's shares to jump, was misleading because he did not actually have the funding lined up for such a move.

According to a report, Elon Musk has resigned as the chairman of Tesla.

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Tesla must also hire an independent chairman to oversee the company.

The agreement allows Musk to stay on as CEO of the company that has struggled to meet manufacturing deadlines and slow cash burn.

Likewise, Tesla will pay another $20 million due to its failure to check whether Musk's announcements complied with the law.

Tesla is seeking to ramp up production of its Model 3, the mass-market vehicle seen as a key to the automaker's future.

It revealed facts based on emails, documents and interviews that private lawyers haven't gained access to yet, giving them a better chance of withstanding Tesla and Musk's attempts to get the shareholder suits thrown out, legal experts said.

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