Tesla shares surge after Elon Musk settles with SEC

Tesla shares surge after Elon Musk settles with SEC

Shares of Tesla Inc jumped almost 15 percent on Monday after Chief Executive Elon Musk settled a lawsuit from the US Securities and Exchange Commission (SEC) that sought to remove him from company management.

The regulator filed a lawsuit against Musk last week, alleging a tweet in which he claimed he'd secured funding for a buyout of Tesla at $420 per share was "false and misleading". The electric car-making company must also appoint two new independent directors to its board, establish a new committee of independent directors and implement additional oversight of Musk's future communications.

The settlement will stand post a court approval in which Tesla and Musk neither admit nor deny the charges levied by the SEC.

Tesla has turned to an army of volunteers to help it meet ambitious third quarter vehicle production targets after a bruising few days for chief executive Elon Musk, who was forced to pay $20m in order to settle a dispute with U.S. regulators.

Stephanie Avakian and Steve Peikin, co-directors of the SEC's Enforcement Division, led the talks, taking the reins from the staff attorneys who worked the case, according two people familiar with the matter.

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"The stock was down so much on Friday because it was unclear if he would remain with the company at all given what the SEC was pushing for", said Garrett Nelson from CFRA Research.

Tesla is now looking to fill its chairman role following the company's announcement of Musk's resignation over the weekend.

'.The lawsuit could serve as a wakeup call for Musk to tone down some of his public-facing behavior, particularly on Twitter, ' Munster explained. Musk had wanted to personally pay the fine for money-losing Tesla but the SEC rejected that proposal, the person said.

Yet a more forceful board, coupled with a domineering CEO like Musk, could create conflicts at a risky time for the company.

In fact, the biggest impact will be the new chairperson of Tesla. The SEC also said that Tesla had not put any procedures in place to determine that Musk's tweets about the company were accurate or complete.

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