Tesla shares jump after Musk settles with SEC

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

The US Securities and Exchange Commission said on Saturday that car-maker Tesla and Chief Executive Elon Musk had agreed to pay $20 million each under a settlement that will also see the billionaire step down as chairman after a tumultuous two months for the company.

The SEC's lawsuit had sought to bar Musk from serving as an officer or director of a public company, a prospect that rattled investors.

That's according to Gene Munster, a managing partner at the venture capital firm Loup Ventures and prominent Tesla bull, who is already talking up replacements for Musk with his seat on the board not-yet cold.

Munster said the settlement was the best outcome for all involved. Tesla was hit with a $20 million fine of their own.

While the 15-year-old company has never earned an annual profit, Tesla's CEO has vowed it's the verge of making money and stemming cash burn that's exceeded more than $1 billion in recent quarters.

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The company has recently been struggling to meet audacious production goals for its Model 3 sedan.

The settlement requires that Tesla appoint two new independent directors and establish a committee of independent board members. Under terms of the agreement, Musk also must give up his seat as chairman of the board of directors for at least three years. The tweets had no basis in fact, and the ensuring market chaos hurt investors, the SEC said. The SEC said the company had no way to determine if his tweets contained information that must be disclosed in corporate filings, or if they contained complete and accurate information.

Many see the forced changes as being positive for Tesla, partly because the mercurial Musk will now have someone to answer to, and partly because his reduced role may allow the chronically overworked CEO to focus more. "At the same time, there will be appropriate restraints in place".

The complaint alleged that Mr Musk made "false and misleading statements" about plans to take the company private in August. Some analysts had said that Musk's departure would harm Tesla's brand, fundraising abilities and stakeholders' confidence if the company lost its key visionary.

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