A federal judge has approved a settlement between the Securities Exchange Commission and Tesla’s Elon Musk after he tweeted in August that he had secured funding to take the company private at $420 a share — a claim that proved not to be true and has cost the company and investors about $12 billion in valuation, according to MarketWatch.
U.S. District Judge Alison Nathan signed orders on Tuesday requiring Musk to step down from his role as Tesla chairman and to have a lawyer oversee and approve all tweets about Tesla to ensure he does not tweet misleading information again. The settlement also requires Musk and Telsa to pay $20 million each to investors who lost money because of Musk’s tweets. Musk still gets to retain his position as Tesla’s CEO, but Tesla’s troubles are far from over.
The SEC is reportedly still investigating the car company to determine whether they misled investors about the reason for and extent of their Model 3 production delays. In 2016, Musk predicted that “as many 200,000 Model 3s would be made in the second half of 2017,” but this was scaled back to 20,000 models. The company fell short of the reduced amount, producing a mere 2,700 cars in 2017. . .
In July, Tesla told investors it had met its goal of assembling 5,000 per week, although the company has been plagued with delivery troubles. Customers who purchased a Model 3 months ago are still waiting.
Musk claimed many of these cars have already been built, but the company is having difficulties handling the logistics of delivering them. Last month, Tesla asked volunteers to deliver cars to customers for free and walk them through some of the features, which makes one wonder if the company has the cash to deliver cars customers have already paid for. (Read more from “Elon Musk Has Reached a Settlement, but Tesla’s Troubles Are Far From Over” HERE)