SEC Lawsuit Against Musk Wiped $7.3 Billion From Tesla’s Market Value

Musk is now required to step down as chairman of Tesla within 45 days, and he is not permitted to be re-elected to the post for three years.

Under the settlement, Tesla and Musk will pay $20 million each to the securities regulator and Musk will step down as chairman but remain as chief executive.

The charges come after Musk claimed in August via a series of tweets that he was planning to take the electric auto maker private, and implied that such a move was imminent with "funding secured".

You see, even with offerings like the Toyota Prius and Nissan Leaf, the idea of a market-friendly electric vehicle that's both stylish and fun-to-drive has never been more mainstream than it has with Musk and Tesla leading the charge.

After repeatedly falling short of its manufacturing targets, Tesla probably produced about 53,457 Model 3s in the third quarter, according to a Bloomberg Tracker that uses vehicle identification numbers and other inputs to estimate output in real time.

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Musk and Tesla must each pay $20 million in fines, which will be distributed to traders who were harmed by the tweets.

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.

From the beginning of this case, the SEC requested as a penalty that Elon Musk had left the position of chairman from the board of Tesla, something that has now been achieved. But it quickly became clear that Musk's funding commitment-supposedly from Saudi Arabia's sovereign wealth fund-was informal at best.

Two "independent directors" will also be appointed by Tesla, and the company will set up a new committee of independent directors and "put in place additional controls and procedures to oversee Musk's communications", the SEC said. Monday's gains erased Friday's 14 percent plunge after the SEC filed its lawsuit late on Thursday. 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.

In emails leaked to CNBC, Musk hinted that Tesla was "very close" to being profitable and told staff to "ignore the distractions".