Musk and Tesla have agreed to settle the charges against them without admitting or denying the SEC's allegations. Munster pointed out that the terms of the settlement actually works in Tesla's favor, as the appointment of a new, capable Chairman of the Board could help Tesla reach sustainability, as well as become the wake-up call that Musk needs with regards to his behavior online.
Tesla jumped as much as 19% to $315.45 at 7:45 am NY time, more than enough to offset Friday's 14% plunge.
But the claim on August 7 that he had the funding to take Tesla private, and a subsequent U-turn, stunned Wall Street and came amid public appearances which saw Musk smoke marijuana live on air and call a British diver in the Thai cave rescue a "pedo".
"The $40 million in penalties will be distributed to harmed investors under a court-approved process", the SEC said.
Shares of Tesla Inc jumped 18 percent on Monday as signs it had met targets for quarterly vehicle production added to relief at Chief Executive Elon Musk's settling of a lawsuit with regulators that had threatened to force him out. Tesla is due to appoint two new independent directors, with the board expected to oversee Musk's communications with investors.
"The SEC's complaint alleged that, in truth, Musk knew that the potential transaction was uncertain and subject to numerous contingencies".
"The resolution is meant to prevent further market disruption and harm to Tesla's shareholders", Peikin added.
The settlement marked a swift end to the SEC's lawsuit, which was filed Thursday.
Furthermore, it adds: "Despite notifying the market in 2013 that it intended to use Musk's Twitter account as a means of announcing material information about Tesla and encouraging investors to review Musk's tweets, Tesla had no disclosure controls or procedures in place to determine whether Musk's tweets contained information required to be disclosed in Tesla's SEC filings".