Tesla’s (NASDAQ:TSLA) weekend has been whirlwind. Shares plummeted on Friday after the SEC announced it would be going after Tesla’s CEO, Elon Musk, for fraud. However, those losses were wiped away this morning after Musk announced there would be a Tesla SEC settlement.
At the time of writing, shares have climbed over 15%, so what’s going on?
Tesla SEC Settlement
Back in August, Musk tweeted that he would be taking his company private.
His announcement caused a 7% increase in share value that day alone and led to “significant market disruption.”
However, going private never actually came to fruition; in fact, the CEO reneged on his tweet days later.
So last week, the government charged him with making “false and misleading statements” to investors by claiming he had secured private funding when in reality he had not. The accusation suggested that Musk deliberately created a tweet to influence TSLA share prices.
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The SEC called the action a violation of the antifraud provisions of the federal securities law. It deemed the CEO’s actions as irresponsible:
“An officer’s celebrity status or reputation as a technological innovator does not give license to take those responsibilities lightly.”
Amended?
But over the weekend, Musk agreed to a settlement with the SEC, which will see him remain as Tesla CEO, but step down as chairman. He must also pay a $20 million fine. He can run for chairman again in three years and in the meantime has a grace period of 45 days to vacate the role.
Musk accepted the deal “without admitting or denying the allegations of the complaint,” according to a court document.
Investors are pleased for another reason today; the company is set to release third-quarter production numbers, which will show if Tesla can sustain its 5,000 Model 3 cars a week production plan. The numbers are expected later this week.
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