Tesla CEO Elon Musk has been ordered by the Securities Exchange Commission to cough up a hefty $20 million fine and resign from his post as the chairman of the company’s board of directors.
Musk’s spat with the SEC comes of the heels of the billionaire’s attempts to take the company private, which would give him more control over Tesla’s future. The billionaire reportedly failed to notify regulators of his restructuring, and will have to enact sweeping reforms in how the company operates as a result.
While it’s been a rough week for Musk, there is little doubt that he got off easy. As part of his settlement with regulators, he will get to maintain his post as Tesla’s CEO, and will be able to once again chair the company’s board after three years. To be sure, this is definitely a roadblock for Musk and Tesla as a whole, but it’s far from being the final nail in the coffin.
Tesla’s real challenge is that its signature contribution — electric vehicles — are far from an exclusive in today’s market. Other international auto makers have stiffened up the competition in recent years, all while several of Tesla’s other projects have stalled. The auto manufacturer definitely has much more to worry about externally, rather than the eccentric nature of its outspoken CEO. However, there is something to be said for the fact that Tesla is more famous for selling flamethrowers than it is for selling cars…
Musk caught the SEC’s attention while he was trying to secure funding to take Tesla private. In a move that raised many eyebrows for many reasons, the billionaire set the company’s stock price at a fixed rate of $420 — an obvious reference to marijuana culture.
“Musk knew that the potential transaction was uncertain and subject to numerous contingencies. Musk had not discussed specific deal terms, including price, with any potential financing partners, and his statements about the possible transaction lacked an adequate basis in fact,” the SEC explained in a statement.
Not long beforehand, the CEO famously appeared as a guest on the Joe Rogan Experience, a popular podcast hosted by the namesake comedian with a loose conversational format. At one point during the three-hour conversation, Rogan and Musk shared a marijuana cigarette — overshadowing earlier conversations about artificial intelligence and Musk’s personal ambitions for a renewable energy economy.
The Joe Rogan Experience is based out of California, where marijuana is legal for recreational use.
Elon Musk’s bizarre statements on Twitter and during media interviews have made him a high-profile personality in the finance world and beyond. His online activities were also the subject of the SEC’s charges against him.
“The SEC also today charged Tesla with failing to have required disclosure controls and procedures relating to Musk’s tweets, a charge that Tesla has agreed to settle,” the SEC added.
While his future with Tesla is at this point uncertain, his status as an internet personality is likely secure. Tesla is also not the South African only venture.
Even if Tesla folds tomorrow (which it won’t), there’s always SpaceX…