The Securities and Exchange Commission in the US has ordered Tesla chairman Elon Musk to step down as part of its investigation settlement.
Musk and Tesla have agreed to pay the US$44 million fine for the chairman’s August 7 tweet which suggested he has secured funding to secure a private buyout of the company.
The settlement with billionaire Musk will still allow him to remain as chief executive, however with both he and the company paying out US$27.5 million to settle the case, the ABC reports.
Tesla’s share price was hit 14% on Friday when the SEC announced its lawsuit, equating to a US$7 billion loss for shareholders.
Tesla’s market value fell below Detroit “big-three” rival General Motors on Friday as a result of the SEC lawsuit, to US$45.2 billion below GM’s US$47.5 billion, Reuters reports.
Financial analysts suggest the quick settlement is the “best possible outcome” for the regulator and Tesla.
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