Elon Musk, Tesla’s Chief Executive Officer and the U.S. Securities and Exchange Commission filed a joint settlement late Wednesday.
The SEC sued Musk last month, accusing Musk of misleading investors, but Tesla is not being charged with fraud.
In the proposed deal, Musk agreed to step aside as Tesla’s chairman for three years and also pay a $20 million fine. Tesla will also accept a $20 million fine. According to the filing, Musk must also “comply with mandatory procedures to be adopted by Tesla concerning the oversight and approval of his Tesla-related public statements,” Bloomberg reported.
The deal now remains in the hands of U.S. District Judge Alison Nathan in Manhattan, who will decide whether or not to accept it. “The proposed settlements in this case are fair,” lawyers for the SEC, Tesla, and Musk said. “Mr. Musk and Tesla have agreed to undertake a number of corporate governance measures specifically tailored to prevent future violations of the type alleged by the SEC here.”
The proposed settlement came days after Tesla’s stocks fell more than 7% on Friday, after Musk mocked the SEC in a series of tweets. “Just want to [say] that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!” Musk tweeted. In a follow up tweet, he wrote, “Why would they be upset about their mission? It’s what they do.”