Tesla CEO Elon Musk tweeted on August 7th that he had been mulling taking Tesla private at $420 per share and that funding for the massive transaction had been secured. It later emerged that while he did have discussions about the matter with potential financial backers it could not be reasonably said that the funding had been secured. The Securities and Exchange Commission filed a lawsuit against Musk after investigating the matter and they claimed that his tweet had misled investors. Musk has now settled the matter with the SEC.

The SEC has imposed $40 million in penalties as part of the settlement. Musk will pay $20 million personally while Tesla will pay an additional $20 million to settle claims that it didn’t properly police Musk’s tweet. The SEC says in a press release that “The $40 million in penalties will be distributed to harmed investors under a court-approved process.”

It doesn’t end there for Musk. The settlement requires court approval and also results in the removal of Musk as chairman of Tesla’s board. He will be barred from seeking re-election for three years. Musk can remain the CEO of Tesla. He has accepted the deal “without admitting or denying the allegations of the complaint,” as per a court document.

As part of the settlement, Tesla has also agreed to appoint two new independent directors to its board and form a board committee which will have oversight on Musk’s communications.

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