Tesla, Elon Musk, and the SEC have jointly filed to seek approval of their agreed upon settlement over Musk’s comment about the attempt to take Tesla private, which the SEC saw as an infraction.
A judge needs to approve the settlement before it becomes official.
As we reported last month, Musk settled the SEC lawsuit.
The terms of the settlement remain the same:
- Musk will step down as Tesla’s Chairman and be replaced by an independent Chairman. Musk will be ineligible to be re-elected Chairman for three years;
- Tesla will appoint a total of two new independent directors to its board;
- Tesla will establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications;
- Musk and Tesla will each pay a separate $20 million penalty. The $40 million in penalties will be distributed to harmed investors under a court-approved process.
But some speculated that closing the deal could be an issue after Musk trolled the SEC following the settlement agreement:
Just want to that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!
— Elon Musk (@elonmusk) October 4, 2018
Yet, the SEC supported the settlement in a joint letter to the court today (see in full below).
In the letter, the SEC writes that they believe the settlement to be “fair, reasonable, and will serve the interests of the public and investors.”
They believe that it will serve investors by “reminding defendants that they must obey the law in the future.”
As for Musk and Tesla, they simply state that they believe that a “prompt resolution” is better for investors:
“Tesla and Mr. Musk believe that a prompt resolution of these actions through settlement is in the best interest of investors and should be approved.”
Similar language is often used when parties don’t believe they did anything wrong or don’t agree with the punishment, but they prefer to settle than go through a trial.
Here’s the letter in full: