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Tesla CEO Inc. (TSLA), Elon Musk, may have reached an agreement with the SEC on his infamous tweet about "secure financing," but the real battles are just beginning on the board of directors from Tesla.
Musk and Tesla must each pay a fine of $ 20 million. Musk is also expected to resign as Chairman of Tesla's Board for a period of three years and within 45 days of settlement.
Musk will remain as CEO – a role he would have played as part of an ultimatum when he quarreled with the board on how to deal with the SEC trial. According to a New York Times report, Musk threatened to resign from his position as CEO when he was forced to accept the SEC's September 28 charges that his "private" tweet was fraudulent. The SEC had proposed a generous settlement that would force Musk to step down as president for two years – but Musk eventually rejected the first deal. The terms of the final settlement included three years of exile from the presidency.
"[The settlement] is sweet in that it is not necessary for the president to be a newly appointed external director on the board of directors, "said John C. Coffee Jr., professor at Columbia Law School . " Tesla's board of directors is a good old boy's club – – former employees, long-time fans, where no one wants to defend it. "
The Times announced that the board of directors would set up a standing committee to oversee Musk's communications and communications. Although the fact that the announcement of "funding obtained" was made on Twitter does not affect the case of the SEC – it was found materially wrong, regardless of how it was sent – Musk's habits on Twitter have become a central part of the concerns of many Tesla investors, and his advice. On Monday, Musk tweeted a link to the song "O.P.P" by Naughty by Nature.
Naughty by Nature https: //t.co/muZdxJWjyZ
– Elon Musk (@elonmusk) October 1, 2018
"The Naughty by Nature tweet suggests that he's not repentant," added Coffee.
Meanwhile, James Murdoch – current board member of Tesla and CEO of 21st Century Fox (FOXA) – is about to replace Musk as president. Coffee suggested that raising another Tesla insider could further strengthen Musk's influence on the board, although Murdoch has only been on the board since 2017.
"Tesla would need someone like Warren Buffett, someone you do not play with," Coffee added. "Once again, I want to emphasize that Musk has a total weight on the board, and it's important to hire a chief of operations." Frankly, he's making efforts that he can not keep up, and they should face the possibility that he has breakdown. "
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