There have been plenty of press reports about the SEC’s settlement with Elon Musk arising from his tweeting about taking Tesla private.
But the concurrent settlement with Tesla itself provides interesting lessons for disclosure and governance at public companies.
Tesla agreed to pay a $20 million penalty and agreed to several “undertakings” to strengthen its governance and controls including a requirement that it add two independent directors to its Board. And, under his own settlement, Musk agreed to step down for three years as chairman of the Board of Directors, although he is allowed to continue as CEO.
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This blog post was republished as, “What the Tesla Settlement Means for Other Companies,” by Harvard Law School Forum on Corporate Governance and Financial Regulation on November 14, 2018.