Elon Musk steps down as Tesla CEO; US automaker settles SEC suit for $40 million

In a major development in the SEC fraud case, Elon mask agreed to resign as the Tesla Chief Executive Officer (CEO) on Sunday. Furthermore, the US car company and Musk will pay USD 20 million each to settle the government lawsuit alleging the tech billionaire duped investors with misleading tweets about stock prices. The US Securities and Exchange Commission announced the settlement just two days after filing a case seeking to remove Musk as CEO.

"The resolution is intended to prevent further market disruption and harm to Tesla's shareholders," Steven Peikin, the co-director of the SEC's Enforcement Division was quoted as saying by Techcrunch.

However, Musk and Tesla reached their settlement without admitting to or denying the SEC's allegations about the proposed buyout of the company.

Following the announcement of his resignation, Musk on Saturday took to Twitter and thanked all Tesla supporters for helping with car deliveries all around the world, adding that "You Rock".  "Just wanted to say thanks to all Tesla supporters. I damn well love you," Musk wrote in another tweet.

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Huge thank you to all Tesla supporters for helping with car deliveries all around the world. You rock!!

— Elon Musk (@elonmusk) September 28, 2018

The difficulties started back on August 7 after Musk tweeted that he could take Tesla private for USD 240 a share and that funding for such a deal had been secured. "Am considering taking Tesla private at $420. Funding secured," the tweet read.

Musk’s tweet has allegedly caused Tesla’s stock price to jump by over six per cent, leading to significant market disruption.

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"In truth, Musk knew that the potential transaction was uncertain and subject to numerous contingencies," wrote the SEC while filling the fraud charges in a federal court New York against the former Tesla CEO.

On Friday, Tesla's stock plummeted 14 per cent after the SEC filed its lawsuit, erasing more than USD 7 billion in shareholder wealth. Many analysts predicted the shares were bound to fall even further if Musk steps down.