Elon Musk

Tesla CEO Elon Musk will have to step down as chairman as part of a settlement with the SEC.

Elon Musk will get to stay on as CEO of the electric car company he founded following a deal with the SEC in which he agreed to relinquish his chairmanship of Tesla.

The settlement came days after the regulator sued the Silicon Valley entrepreneur for fraud over a post last month that he had lined up funding to take Tesla private at $420 per share. The SEC sought in the suit to oust Musk as CEO of Tesla and bar him from leading a public company.

Musk will not be required to admit any wrongdoing as part of the settlement, but he and his company will have to pay fines. According to The Verge:

Alongside the settlement, the SEC also charged Tesla with “failing to have required disclosure controls and procedures relating to Musk’s tweets,” according to the agency. Tesla has already agreed to settle this charge. Both Musk and the company will pay separate $20 million fines that will “be distributed to harmed investors under a court-approved process,” according to the SEC, and Tesla is being made to appoint two new independent directors to its board. The company will also hire a lawyer to monitor Musk’s communications, including his tweets, according to the agreement.

“The total package of remedies and relief announced today are specifically designed to address the misconduct at issue by strengthening Tesla’s corporate governance and oversight in order to protect investors,” Stephanie Avakian, co-director of the SEC’s enforcement division, said in a statement.

The SEC started its investigation in August, after Musk announced on Twitter he might take the company private. Regulators called that tweet false and misleading to investors.

“Musk knew that he had never discussed a going-private transaction at $420 per share with any potential funding source, had done nothing to investigate whether it would be possible for all current investors to remain with Tesla as a private company via a ‘special purpose fund,’ and had not confirmed support of Tesla’s investors for a potential going- private transaction,” the SEC wrote.