Musk & SEC Explain Settlement In Joint Letter To Judge
Now, we just wait for the judge’s approval.
Following the recent disclosure of a proposed settlement between Elon Musk and the SEC, the two sides were instructed to provide a judge with a full explanation of the terms so that the process could be made final. Musk (Tesla) and the SEC submitted a joint letter dated October 10, 2018 to assure that the deal is fair and proper on both sides of the argument — in the judge’s words, “minimal determination of whether the agreement is appropriate.” U.S. District Judge Alison Nathan requested the letter and should soon make her decision.
This all takes us back to the CEO’s August tweets about considering taking Tesla private. Musk found himself heavily scrutinized and eventually subpoenaed specifically related to his “funding secured” confirmation, among other issues. Being that it was later realized that funding may not have actually been set, this was considered a violation by Musk and one that likely jeopardized certain stockholders’ financial situations.
As we previously reported, the settlement calls for Musk to step down from his position as Tesla’s board Chairman, pay a fine of $20 million, and be subject to future communication monitoring. Additionally, Tesla was slapped with a separate $20 million fine and two new independent directors must be appointed to the board. There are more specific details related to the settlement, which you can find in absolute detail by following the link at the bottom of the page.
The SEC explained in its portion of the letter that it “considered multiple factors in determining appropriate civil penalties.” These factors include but are not necessarily limited to:
- the market impact caused by the alleged conduct
- the Defendants’ financial means
- the Defendants’ willingness to settle these actions promptly
- the Defendants’ apparent lack of pecuniary gain
- the limited temporal scope of the conduct
Tesla and CEO Musk’s portion of the letter simply says:
Tesla and Mr. Musk believe that a prompt resolution of these actions through settlement is in the best interests of investors and should be approved.
The official letter can be accessed by clicking here.