In SEC fraud case, Elon Musk will pay $20 million, quit as Tesla chairman, and have a boss

That sure was an expensive 420 joke. Tesla CEO Elon Musk has agreed to pay $20 million and step down from his role as chairman of the board of the company he founded for three years, in a deal with the U.S. Securities and Exchange Commission (SEC).

The worst humiliation Elon Musk will have to face won't be the $20 million fine or the loss of his role as chairman. Elon Musk now has to have a boss.

Hope they hire a good tweet editor for him, too.

Musk didn't admit or deny that he misled investors under the civil fraud charge. Tesla was not charged with fraud.

From Matthew Goldstein at the New York Times:

The S.E.C. announced the deal two days after it sued Mr. Musk in federal court for fraud and misleading investors over his post on Twitter last month that he had "funding secured" for a buyout of the electric-car company at $420 a share.

It is not clear why Mr. Musk changed his mind and agreed to settle but shares of Tesla have been hit hard since the S.E.C. filed the lawsuit. On Friday, the stock dropped about 13 percent.

The deal will allow him to remain as chief executive officer.

The terms are slightly tougher than those that two people briefed on the talks said Mr. Musk had rejected on Thursday, which called for a two-year bar on serving as chairman and a $10 million fine.

Tesla, which is also settling, will pay a $20 million penalty.

The company will add two independent directors and take steps to monitor Mr. Musk's communications with investors. It will also create a permanent committee of independent directors to monitor disclosures and potential conflicts of interest.