In a settlement with the SEC, Elon Musk, 47, agreed to step down as Tesla chairman within 45 days and be replaced with an independent board director. He will remain CEO of the company he co-founded.
Elon Musk insulted the Securities and Exchange Commission five days after settling a fraud lawsuit brought by the agency, potentially imperiling a settlement that allows him to stay Tesla Inc.’s CEO.
The CEO called the SEC the “Shortseller Enrichment Commission” and chastised the regulator for “doing incredible work” in a tweet late Thursday. Tesla shares dropped as much as 3.1 percent after the close of regular trading.
The post risks jeopardizing a settlement reached Saturday in which Musk, 47, agreed to step down as chairman within 45 days and be replaced with an independent board director. The SEC also hit the billionaire and the electric-car maker each with $20 million fines and is requiring that Tesla implement procedures and controls to oversee Musk’s communications, including his tweets.
“Reading the mind of Elon Musk is beyond my ability, but he is soon to join the SEC in front of a federal judge to defend the recent settlement agreement,” said Stephen Diamond, an associate professor of law at Santa Clara University, who specializes in corporate governance. “If he doesn’t want to put that deal at risk he ought to pay attention to cars instead of Twitter.”
U.S. District Judge Alison Nathan, who must approve the settlements Musk and Tesla agreed to with the SEC, gave both sides until Oct. 11 to explain why the agreements are fair and reasonable.
Tesla declined to comment. Ryan White, an SEC spokesman, declined to comment.
The SEC accused Musk in a lawsuit a week ago that he misled investors with his infamous Aug. 7 tweets about having the “funding secured” to take Tesla private. The company’s shares tanked 14 percent the following day as the agency sought to ban Musk from serving as a company officer. After the settlement reached over the weekend, the shares surged 17 percent on Monday.