Just last week, Musk cleared a dark cloud hanging over the company when he agreed to settle a Securities and Exchange Commission case alleging he had misled investors by declaring he had lined up the financing to take Tesla private.
But several experienced litigators said Monday that, while the DOJ probe is separate, the SEC's settlement could mark the end of official action against Tesla and Musk. Musk will remain CEO but will lose his Chairman seat as part of the settlement with SEC.
Shares of Tesla jumped as much as 17 percent on Monday as Elon Musk settled a lawsuit from federal regulators and a report said the company has hit its quarterly production targets. As part of the settlement, Tesla will name two new, independent directors to its board. According to the SEC, "no disclosure controls or procedures" were put in place "to determine whether Musk's tweets contained information required to be disclosed in Tesla's SEC filings". It was one of Elon's first tweets since settling with the regulatory agency.
The deal, which still has to be approved in federal court, calls for Musk to step down from his post as chairman within 45 days.
In the last week of the quarter, we produced over 5,300 Model 3 vehicles, nearly all of which were dual motor, meaning that we achieved a production rate of more than 10,000 drive units per week. Under terms of the agreement, Musk also must give up his seat as chairman of the board of directors for at least three years.
The baby who will not forget Melania Trump's hug
First lady Melania Trump holds a baby as she visits Greater Accra Regional Hospital in Accra, Ghana , on october 2, 2018. Next up, she was headed off to a private tea with the First Lady of Ghana at the presidential palace.
Musk tweeted on August 7, 2018, that he could take Tesla private at a substantial premium price, accounting to $420 per share.
Its shares rebounded 17 per cent on Monday in the USA to rebound to around $US310 a share, returning the company to a $US53 billion plus ($A73 billion) valuation, and no doubt causing rage among its critics and short sellers.
The Model 3 sedan is key to the money-losing company's growth and profit plans and underpins its goal of eventually becoming a mass-production automaker. Tesla also made a major leap in the number of cars that were delivered to customers who had pre-ordered them.
Many see the forced changes as being positive for Tesla, partly because the mercurial Musk will now have someone to answer to, and partly because his reduced role may allow the chronically overworked CEO to focus more.