A US district court judge approved Tesla Inc (NASDAQ:TSLA) CEO Elon Musk's $40 million settlement with the Securities and Exchange Commission over fraud charges stemming from his early August tweet to take the company private, a report by Bloomberg said.
Judge Alison Nathan signed off on the deal Tuesday, after Musk and the SEC said the agreement was in the best interest of investors in the electric-car maker. The company will pay $20 million and Musk will also pay a $20 million penalty.
Musk had tweeted on August 7 that he planned to take the company private and that funding had been "secured," a claim that turned out to be not accurate and prompted some investors to sue him as a result.
Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk) August 7, 2018
The plan was eventually abandoned by Musk and the SEC swiftly opened an investigation. Within a few days of the settlement, Musk fired off another tweet insulting the SEC.
Just want to that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!— Elon Musk (@elonmusk) October 4, 2018
Despite muddling the picture, the deal went ahead.
Resolution of the case would allow Tesla to move on from the issue and go back to the business of producing electric vehicles.
As part of the settlement, Musk agreed to relinquish the post of chairman of Tesla although he remains CEO.
The market welcomed news the settlement had been finalized, with Tesla shares hitting a session top of $273.88 and trading 3.66% up at $269.08.
Reporting by Rene Pastor, contactable on [email protected]