Tesla’s Chief executive Elon Mush reached a deal with the Securities and Exchange Commission (SEC) on Saturday to resolve securities fraud charges. Under this settlement Mr. Musk has to step down as chairman for three years and pay a $20 million fine.
As per the settlement agreement signed by Musk and SEC, along with the penalty, Musk will resign as chairman within 45 days, not seek reelection or accept an appointment as chairman for three years.
Although the terms of the settlement will force Musk o step down as chairman of the Silicon Valley-based company, but he will remain in his post as CEO.
Tesla's stock sank 14 percent, dissolving more than $7 billion in shareholder returns after one day of SEC filed its lawsuit.
The company is facing reduction in the Tesla stock since August 7 tweet. According to The Associated Press Tesla's stock has fallen 30 percent, closing Friday at $264.77
Earlier, SEC has alleged that Musk had not discussed specific deal terms with any potential financing partners, and allegedly he was aware that the potential transaction was uncertain and subject to many contingencies.