Elon Musk has been forced to step down as chairman of Tesla following a series of tweets claiming he was going to take the electric car company private.
Musk is accused of misleading investors after he tweeted that he had secured funding to take the electric carmaker private last month.
The Tesla CEO and the US Securities and Exchange Commission (SEC) reached a settlement over fraud charges and Musk will step down as chairman of Tesla’s board in 45 days.
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The Express reports: Both Tesla and Mr Musk will each pay $20million (£15million) to settle the case, but the serial entrepreneur will remain as chief executive.
On August 7, Mr Musk tweeted that he had the funding in place to take Tesla private at $420 (£322) per share.
The SEC said the claims were “false and misleading”.
The regulators said on Saturday: “Musk tweeted on August 7, 2018 that he could take Tesla private at $420 per share — a substantial premium to its trading price at the time — that funding for the transaction had been secured, and that the only remaining uncertainty was a shareholder vote.
But ”in truth, Musk knew that the potential transaction was uncertain and subject to numerous contingencies.
“Musk had not discussed specific deal terms, including price, with any potential financing partners, and his statements about the possible transaction lacked an adequate basis in fact,” they added.
Mr Musk first responded to the charges by saying the action was “unjustified” and he acted in the “best interests of truth, transparency and investors”.
Elon Musk told Business Insider on Thursday: “This unjustified action by the SEC leaves me deeply saddened and disappointed.
“I have always taken action in the best interests of truth, transparency and investors.”
After Mr Musk’s tweet, Tesla’s stock rocketed by over six percent on August 7, the SEC said.
However, since then the market value of Tesla has plummeted by $19.6 billion (£15billion), a drop of more than 30 percent.
Shares of Tesla nosedived by nearly 14 percent on Friday, marking its worst one-day decline in nearly five years.
Niamh Harris
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