Under the terms of the settlement, Musk and Tesla neither admit nor deny the SEC's allegations. The SEC cited "significant market disruption" as the primary repercussion of Musk's loose lips, as well as questioning Tesla's dissemination of information.
Tesla shares had sank last week after the SEC filed a lawsuit accusing Musk of securities fraud and demanding the Silicon Valley billionaire be removed his role as chief executive. As part of that deal, Musk also has to pay $20 million in fines. Some analysts had said that Musk's departure would harm Tesla's brand, fundraising abilities and stakeholders' confidence if the company lost its key visionary. The funding had not been secured. Tesla's free cash flow in the second quarter totaled negative $739.5 million, bringing the company to a net loss of $717.5 million, the company reported in August.
Given said controversies you might have thought Musk would be keen to keep a low profile, especially with him having lost his job over his cavalier remarks.
Under the deal, Musk will step down as Tesla's chairman, to be replaced by an independent chair.
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Tesla stock rose 17.3 per cent to $US310.70 after a 14 per cent plunge on Friday.
Lawyers say the settlement and size of the fine may give more ammunition to short-sellers pursuing separate cases against Mr Musk for manipulating the company's shares as well as to a probe by the Justice Department.
The numbers initially lifted Tesla shares but they fell later as investors anxious about the company's warning that a 40-percent tariff on Chinese imports of its cars was blocking sales in the world's biggest electric auto market.
The settlement with the SEC won't be the end of the matter, though, as Musk is also facing a series of class action lawsuits relating to the tweets.
On Saturday, the SEC said that it also charged Tesla the same day "with failing to have required disclosure controls and procedures relating to Musk's tweets, a charge that Tesla has agreed to settle". There remain significant opportunities to grow the addressable market for Model 3 by introducing leasing, standard battery and other lower-priced variants of the vehicle, and by starting global deliveries.