Elon Musk steps down as Tesla chairman following deal with United States regulators

Media playback is unsupported on your device                  Media caption Who is Elon Musk

Media playback is unsupported on your device Media caption Who is Elon Musk

He will remain as the vehicle maker's CEO.

The deal comes just two days after the SEC filed a lawsuit against Musk for fraud and misleading investor investors about a buyout of the popular electric vehicle company when he tweeted "Am considering taking Tesla private at $420".

He wrote he had "funding secured" for the proposal, which would value Tesla at $420 per share.

Steven Peikin, Co-Director of the SEC's Enforcement Division added: 'As a result of the settlement, Elon Musk will no longer be Chairman of Tesla, Tesla's board will adopt important reforms -including an obligation to oversee Musk's communications with investors-and both will pay financial penalties. Neither Musk nor Tesla are admitting any wrongdoing. "Musk had not discussed specific deal terms, including price, with any potential financing partners, and his statements about the possible transaction lacked an adequate basis in fact". The SEC charged Tesla with failing to have required disclosure controls and procedures for Musk's tweets.

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In addition, Tesla must replace Musk with an independent chairman; Musk can't be considered as chairman for at least three years.

The fraud allegation relates to his August tweet in which he said he was considering taking Tesla off the stock market and into private ownership.

Tesla has agreed to settle the complaint with the SEC and will appoint two new independent directors to its board.

The SEC said those claims were "false and misleading".

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