Its Big Thing To See
These days Elon Musk is under pressure from his lawyers and the company Tesla. Read here what legal experts are saying about the settlement.
The Securities and Exchange Commission reached a settlement with Tesla CEO Elon Musk on Saturday. Under the terms of the settlement, Musk doesn’t admit or deny the allegations in the agency’s lawsuit against him, but he will step down as the chairman of Tesla’s board of directors for three years and pay a $20 million fine.
The agency sued Musk on Thursday after he reportedly rejected a settlement under which he would have had to step down as board chairman for two years, add two independent directors to the company’s board, and pay a nominal fine, according to CNBC. The SEC alleged in the lawsuit that Musk made “false and misleading statements” in August about the possibility of taking the Tesla private. The agency sought to bar Musk from being an officer or director of a public company.
The SEC alleged that Musk said a representative from Saudi Arabia’s Public Investment Fund had shown interest in taking Tesla private but that Musk had never discussed any of the specific terms he described on Twitter with the Saudi fund or any other potential backers before making them public. According to the SEC, those terms included a proposed $420 share price and an option for all existing Tesla shareholders to remain with the company after it went private.
Musk said in a company statement Thursday that he was “deeply saddened and disappointed” by the lawsuit, which he described as “unjustified.”
Here’s how four legal experts reacted to the SEC’s settlement with Musk.
Gregory Sichenzia — partner at Sichenzia Ross Ference
Jay Dubow — partner at Pepper Hamilton
JR Lanis — partner at Drinker Biddle
Renato Mariotti — partner at Thompson Coburn
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