Nov. 8 (UPI) -- Tesla said founder Elon Musk is stepping down as chairman of its board, as part of a settlement with federal regulators over a controversial tweet he sent three months ago.
The Securities and Exchange Commission said Musk manipulated the market with an Aug. 7 tweet, in which he said he was exploring taking Tesla private at $420 per share. He also said he'd secured funding for the venture. In September, the SEC sued Musk for making "false" and "misleading" statements to investors.
"The market reacted to this information and Tesla's stock price quickly traded up," Stephanie Avakian, SEC co-director of the Division of Enforcement, said in September. "We allege that he had not even discussed key deal terms, including price, with any potential source of funding."
On Wednesday, Tesla announced Musk's departure from the board and named technology executive, and former Tesla board member Robyn Denholm as his successor. Denholm has worked as chief financial officer at Australian telecommunications company Telstra, and will lead Tesla's board after a six-month notice period.
"Robyn has extensive experience in both the tech and auto industries, and she has made significant contributions as a Tesla board member over the past four years in helping us become a profitable company," Musk said in a statement. "I look forward to working even more closely with Robyn as we continue accelerating the advent of sustainable energy."
As part of the SEC deal, Musk remains chief executive of Tesla but pays a $20 million fine. Tesla itself was also fined $20 million and the company agreed to add two independent directors.
The company also agreed to monitor Musk's communications with investors. The company avoided fraud charges with the deal and Musk did not have to admit to any wrongdoing, The New York Times reported.