Elon Musk: Tesla boss mocks U.S. regulator days after settlement

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Tesla CEO Elon Musk has reached a settlement with the US Securities and Exchange Commission that requires him to pay a US$20 million fine and step down as chairman, but lets him stay on as chief executive of the electric carmaker.

In a letter to investors, David Einhorn, the manager of hedge fund Greenlight Capital, warned that investors should be very wary of Tesla stock.

The tweet appeared to jar investors, who drove Tesla shares down 2.4 percent in after-hours trading to $275.

The SEC's allegation of fraud against Mr Musk related to tweets he posted in August in which he said he was considering taking electronic auto maker Tesla off the stock market and into private ownership.

We all know the story by now: Musk suggested on Twitter that Saudi Arabia would be taking Tesla private, sending shares soaring, but changed his mind shortly after, resulting in the SEC filing a lawsuit against Musk saying that he had been manipulating shares.

The SEC sued him last week, accusing him of misleading investors and pushing to ban him from running any public company.

U.S. district judge Alison Nathan had earlier in the day requested Musk and the SEC send an explanation of the deal in a joint letter by 11 October, justifying why it was fair and in the public interest.

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"Taking care to provide truthful and accurate information is among a CEO's most critical obligations", added SEC Enforcement Division co-director Stephanie Avakian.

The SEC, Mr Musk and Tesla must file documents later this month to prove the terms are "fair and reasonable".

The SEC, whose @SEC_News Twitter handle has about 251,000 followers to Musk's more than 22.8 million, is also active on the messaging service but has refrained from posting about Musk or Tesla since last weekend's settlement.

Lawyers said prior to Musk's latest tweet that his settlement would probably win approval, though orders such as Nathan's are not particularly common.

Within the hour of the original tweet, Musk responded to a comment on his Tweet professing to apologize for the "typo" in the original tweet (as he seemed to leave out the word "say").

"Mr. Musk has excellent attorneys", said Marc Leaf, a partner at Drinker Biddle & Reath in NY who used to work for the SEC as an adviser to a commissioner. Musk resigned as Chairman of the company, but remains the CEO and will have to pay a fine. This will target to take away the position of Elon Musk as the director of the company.

The judge overseeing the case has asked Tesla and the SEC to write a joint memo justifying the settlement.

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