Tesla had a good offer from the SEC: Here's why he had a worse deal

Tesla CEO and President Elon Musk has blocked an initial settlement proposed by the US Securities and Exchange Commission (SEC) last week. The agreement they got instead, after a lawsuit and a 14% fall in share price, was worse for Tesla and Musk, who will leave their presidential post for at least three years.

As usual, the result depended on the disproportionate personality of Musk, the New York Times reports in a history of chronology.

The interim terms of the SEC did not require Musk to plead any of the means to mislead investors, but prevented him from publicly stating that he had done nothing wrong. That hurt him: Musk preferred to call his tweet of $ 420 "negligence".

Then on Thursday, Musk told Tesla's board of directors that he would resign if he made progress in the deal, which the experts described as generous. He also urged them to issue a statement that they were "fully confident in Elon, his integrity and his leadership in society".

Tesla's board has helped Musk, former SEC commissioner Jeffrey Sonnenfeld told CNBC on Thursday. "What he's telling us is that this council, as a strategic plan, must use Jim Jones Jonestown's suicide pact." They drink the founder's Kool-Aid. It's just as destructive as Musk, "Sonnenfeld said.

The SEC reacted on Friday with a lawsuit against Musk that caused panic among investors.

On Saturday, Tesla's lawyers were back at the SEC offices, where they agreed to keep Musk out of the role of president for another year, to double Musk's $ 20 million fine and pay a separate fine. $ 20 million to Tesla. Musk will also purchase an additional $ 20 million in Tesla shares. Tesla will also add independent directors to its board, one of whom will be the chairman. Perhaps the worst of all for Musk, Tesla must now review all communications that may contain important information, including his tweets.

"As court and governance researchers have long recognized, the presence of a dominant shareholder may reduce the effectiveness of independent directors as supervisors of CoE decisions and behavior." Lucian Bebchuk, Legal Officer Harvard, said to the New York Times.

Yet investors are back. Shares rose by 15% under the terms of the new agreement.