What to Know
- A judge approved Tesla CEO Elon Musk's settlement with the Securities and Exchange Commission
- The SEC had alleged that Musk committed fraud when he said he had secured the funding needed to take Tesla private
A judge approved Tesla CEO Elon Musk's settlement with the Securities and Exchange Commission over allegations that Musk committed fraud when he said he had secured the funding needed to take Tesla private.
Tesla shares jumped nearly 5 percent on the news, which was first reported by Bloomberg.
The deal is a positive development for Musk and Tesla, which is in the midst of ramping up production and deliveries of its Model 3 sedan, and trying to assure investors the company can become sustainably profitable.
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Musk and the SEC had filed a joint letter late Wednesday saying the terms of their settlement would be in the best interests of investors.
Under the terms of the deal, Musk has to pay a $20 million fine and step down as Tesla chairman within 45 days for a period of at least three years. Tesla must also put in place a system for monitoring Musk's statements to the public about the company, whether on Twitter, blog posts, or any other medium.
The SEC filed charges against Musk on Sept. 27, just hours after reports said Musk had rejected an initial settlement offer from the agency.
Tesla confirmed the settlement by declined to comment further.
This story first appeared on CNBC.com. More from CNBC: