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Tesla and SEC ask court to approve $40m deal

11/10/2018 13:10

(Sharecast News) - Tesla and the Securities and Exchange Commission have asked a New York court to back their $40m agreement, despite a controversial tweet by Elon Musk seemingly undermining the deal. The US car group agreed at the end of September to pay out over claims that its outspoken chief executive had misled the public when he tweeted he planned to take Tesla private. The agreement with the Wall Street regulator, which allows Musk to stay on as chief executive, required the billionaire to neither deny nor admit the allegations. But a few days after striking the deal, Musk posted a mocking tweet, saying: "Just want to say that the Shortseller Enrichment Commission is doing incredible work.

And the name change is so on point!" Market watchers believed the wording and tone could undermine the deal, which still needs court approval.

Tesla's Nasdaq-listed shares have enduring a bumpy October so far, ending Wednesday's session down 2% at $256. But late on Wednesday, Tesla and the SEC told the US District Court, Southern District of New York, in joint filing that the e deal was in the best interest of investors, adding: "We therefore respectfully submit that the court should accept and enter the proposed consent judgements." Under the deal, Musk must step aside from the chairman's role for three years, pay a $20m fine and accept another $20m penalty, despite not being charged with fraud. Earlier this week, reports said the outgoing chief executive of 21st Century Fox, James Murdoch, would replace Musk as chairman.

But Musk - a prolific user of Twitter with 22.9 million followers - has since tweeted the reports are "incorrect".

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