Tesla shares surge after Elon Musk settles with SEC

Tesla shares surge after Elon Musk settles with SEC

Tesla shares surge after Elon Musk settles with SEC

Over the weekend, the US Securities and Exchange Commission (SEC) fined Tesla CEO Elon Musk $40 million split between both himself and the company, based on allegations of fraud causing significant disruption in the stock market.

According to The Washington Post, the SEC had offered similar settlement terms a week prior to the lawsuit that Musk passionately declined, saying the "unjustified action" left him "deeply saddened and disappointed". The SEC had alleged that Musk either knew or was reckless in not knowing that statements made about his go-private plans were false or misleading.

Musk initially said the SEC's charges were "unjustified" but has now reached an agreement with the body to settle the charges.

The news of Tesla CEO Elon Musk settling with US financial regulators sent the company's stock soaring Monday morning.

Initially, Musk was ready to accept SEC's proposed settlement that stipulated he would step down as chairman for two years and pay between $5-10 million as a fine.

In a September 30 email, filed with the SEC on Monday, Musk said the electric vehicle maker is nearly there.

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Musk recently stated that the company was in "delivery logistics hell", a problem which he attributed to the lack of trucks to transport newly purchased cars around the country. As CEO, Musk will essentially remain in day-to-day charge of the firm, but he will likely face more oversight and control from the board and the new chairman.

In emails to Tesla staff, Musk said that if the staff could pull through the pressure on Sunday, the company could be close to achieving an "epic victory" on production goals, CNBC reported.

A tweet can be worth a thousand words, or in Elon Musk's case, millions of dollars.

Musk said August 7 in a company blog post that he was considering taking Tesla private at $420 per share, representing a 20% premium over the stock price following the company's second-quarter earnings release.

The company has said that more than 400,000 customers are waiting to buy Model 3 sedans, and that each paid a $1,000 deposit.

The numbers initially lifted Tesla shares but they fell later as investors anxious about the company's warning that a 40-percent tariff on Chinese imports of its cars was blocking sales in the world's biggest electric vehicle market.

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