The agreement eases pressure on Tesla's embattled CEO, who faced potentially being barred from serving as an officer or board member of a publicly traded company as a result of the charges, which stemmed from a tweet by Musk about taking the company private.
Elon Musk is confident that Tesla Inc.
Musk, whose tweets on August 7 on a plan to take Tesla private that was later abandoned, has tweeted only once since the settlement was announced - posting a music video by rap group Naughty by Nature. The SEC's lawsuit charged that the tweet, which caused Tesla's shares to jump, was misleading because he did not actually have the funding lined up for such a move.
Elon Musk told Tesla employees that the company was on the cusp of making money, hours after he and the carmaker reached a settlement with the USA that steps up oversight of the chief executive officer's communications of material information. NY time, clawing back Friday's 14 percent plunge.
While the 15-year-old company has never earned an annual profit, Tesla's CEO has vowed it's the verge of making money and stemming cash burn that's exceeded more than $1 billion in recent quarters.
Under the agreement - which Clayton said was "in the best interests of our markets and our investors, including the shareholders of Tesla" - Musk will be ineligible to serve as chairman of the board for a period of three years and will be replaced by an "independent chairman", according to the SEC.
The auto company has been aiming to hit a production target of between 50,000 and 55,000 vehicles per week, according to the company's own estimates. The SEC said the company had no way to determine if his tweets contained information that must be disclosed in corporate filings, or if they contained complete and accurate information. Tesla's Denver drivers' club president Sean Mitchell said on Twitter that a team of "30 volunteers were providing 40 [plus] hours helping deliver and teach new owners" about the cars' different features.
Steven Peikin, co-director of the SEC's Enforcement Division said the resolution is meant to prevent further market disruption and harm to Tesla investors. Tesla is required to appoint two new independent directors to its board.
Tesla shares took a steep dive last Friday, plunging 13.90% amidst news of the SEC's lawsuit against the outspoken CEO.
Gore has previously noted his admiration for Tesla and Musk.