Elon Musk to step down as Tesla Chairman

Tesla Chief Executive Officer, Elon Musk has agreed to resign as the chairman of the electric automaker.

Musk will also pay a fine of 20 million US Dollar under a settlement reached with the United States Securities and Exchange Commission (SEC), reported Techcrunch. He will, however, keep the position of CEO of the car-maker firm.

According to the settlement agreement signed by Musk and SEC, along with the penalty, he will resign as chairman within 45 days, not seek reelection or accept an appointment as chairman for three years, appoint two new independent directors to its board and establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk's communications.

Techcrunch quoted the co-director of the SEC's Enforcement Division, Steven Peikin as saying in a statement : "The resolution is intended to prevent further market disruption and harm to Tesla's shareholders."

This comes two days after SEC filed a lawsuit against Musk on the charges of securities fraud, alleging he made "false and misleading" tweets about a potential transaction to take the company private.

On August 7, Musk tweeted that he was considering taking Tesla private at $ 420, adding "funding secured"."Am considering taking Tesla private at $420. Funding secured," the tweet read.

In its complaint, filed in federal court in the Southern District of New York, the SEC alleged that "in truth, Musk had not discussed specific deal terms with any potential financing partners, and he allegedly knew that the potential transaction was uncertain and subject to numerous contingencies."

The SEC also claimed that Musk's tweets caused Tesla's stock price to jump by over six percent on August 7, and led to significant market disruption.