Tesla CEO Elon Musk’s settlement with the SEC has been approved by a judge. The South African businessman and investor was accused of fraud after tweeting that he had secured funding to take his auto-maker, Tesla, private.Musk will have to pay a hefty $20m fine and is being forced to step down as chairman within the next 6 weeks. The charges against Musk were filed by the SEC in the early fall, shortly after Musk allegedly rejected a potential settlement offer. Tesla stock plummeted around 40 points after his “secure funding” tweet. Musk, often boisterous and grandiose in his ideas, designs, and persona, is no stranger to trouble after he was shown smoking weed in a live broadcast.
Fraud is defined as an intentional deception aimed at benefiting one party and hurting another. Securities fraud specifically involves misleading investors to manipulate stock prices or company evaluations based on false information. Musk was a co-founder of PayPal, the online payment platform and also founder, CEO, and lead-designer of SpaceX, the aerospace manufacturer. Tesla shares rebounded 5% on news of the settlement, though the company still fails to meet self-proposed timetables when creating their vehicles. Who knew a tweet could cause such an expensive problem?