Tesla Inc. and the U.S. Securities and Exchange Commission have put aside tweets insulting the agency to ask a judge to accept a proposed settlement in a fraud suit against the electric carmaker and its outspoken CEO.
In a joint submission seeking judicial approval, the SEC, Tesla and CEO Elon Musk said the proposed deal -- paying a combined $40 million to resolve claims that Musk misled the public by tweeting about his plan to take Tesla private -- was in the “best interest” of investors, according to a court filing Thursday.
A few days after the Sept. 29 settlement, Musk dubbed the SEC as the “Shortseller Enrichment Commission” in a tweet, making the insult before trying to win court approval of the hard-fought deal. The agreement also requires Tesla to appoint an independent chairman to replace Musk and add two directors to the board.
Neither Tesla nor Musk admitted wrongdoing under the settlement, which was reached two days after the regulator sued the billionaire over his tweeted claims to have had the funding and investor support to buy out stockholders at $420 a share. The deal eases uncertainty over Tesla’s future, after the SEC’s lawsuit had sought to bar Musk from serving as an officer or director of a public company, a prospect that rattled investors.
The parties had until Thursday to explain to U.S. District Judge Alison Nathan in Manhattan, whose approval is required, why the agreement was “fair and reasonable.”
Murdoch report denied
Separately, Musk denied a report in the Financial Times that James Murdoch is poised to replace him as chairman, prolonging the uncertainty over Tesla's leadership after the SEC deal.
Murdoch, the CEO of Twenty-First Century Fox Inc. and a Tesla board member, is the lead candidate for the job, the Financial Times said, citing two people briefed on the discussions.
The newspaper is wrong, Musk tweeted in response, without elaborating.