Elon Musk resigns as Tesla chairman with multi-million dollar settlement

CEO Elon Musk unveils a new all-wheel-drive version of the Model S car in Hawthorne California

Musk is now required to step down as chairman of Tesla within 45 days, and he is not permitted to be re-elected to the post for three years.

Avakian and Peikin demanded that Musk pay $20m and be removed as Tesla's chairman for at least three years, harsher terms than were being offered in the scrapped deal, people familiar with the matter said.

Under the settlement, Tesla and Musk will pay $20 million each to the securities regulator and Musk will step down as chairman but remain as chief executive.

Musk's tweet about taking his company private, along with attacks on critics on social media, raised concerns with investors about whether Musk has become too focused on criticism from so-called short-sellers who had been making bets against him and Tesla.

Tesla shares sank last week after the SEC accused Mr Musk of securities fraud, opening up the prospect of a long-drawn out fight that could have seen Tesla lose its leader, undermine its ability to raise capital and cripple operations.

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The electric vehicle maker is expected to report third-quarter production numbers on Tuesday, following a period of turbulence, including a run-in with securities regulators that culminated in Musk being ousted as Tesla's chairman and hit with a multimillion-dollar fine.

Loup Ventures Managing Partner Gene Munster noted that the SEC settlement is the best outcome possible from Elon Musk's "funding secured" fiasco.

The settlement marked a swift end to the SEC's lawsuit, which was filed Thursday. The appointment of two new Board members, as well as the creation of a committee tasked with "placing additional controls and procedures to oversee" Musk's communications, were warmly received by the Tesla community as well.

The SEC had charged Musk with securities fraud, alleging that he misled investors when he tweeted on August 7 that he had "funding secured" to privatise the electric automaker at $420 (roughly Rs. 30,500) a share. Tesla's Denver drivers' club president Sean Mitchell said on Twitter that a team of "30 volunteers were providing 40 [plus] hours helping deliver and teach new owners" about the cars' different features.

"We are very close to achieving profitability and proving the naysayers wrong, but, to be certain, we must execute really well tomorrow (Sunday)", Musk wrote in a mail to employees on Saturday.

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