Tesla looking for new Chairman after Musk's 'funding secured' tweet

Elon Musk has agreed to step down as chairman of Tesla Inc. for three years and pay a $20 million fine in a deal with the stock market regulatory authority, Securities and Exchange Commission (S.E.C.) to resolve securities fraud charges.

The S.E.C. announced the deal on Saturday two days after it sued Musk in federal court for misleading investors over his post on Twitter last month that he had "funding secured" for a buyout of the electric-car company at $420 a share, reports The New York Times.

Under the settlement, which requires court approval, Musk will be allowed to stay as CEO but must leave his role as chairman of the board within 45 days. He cannot seek re-election for three years, according to court filings.

He accepted the deal with the SEC "without admitting or denying the allegations of the complaint", according to a court document.

The company also agreed to appoint two new independent directors to its board and establish a board committee to oversee Musk's communications, reports CNN.

His tweet about taking his company private, along with attacks on critics on social media, raised concerns with investors about whether Musk has become too focused on criticism from so-called short-sellers who had been making bets against him and Tesla.

The company has recently been struggling to meet audacious production goals for its Model 3 sedan.

The company, whose shares have been hit hard since the S.E.C. filed the lawsuit, did not immediately comment on the settlement.

On Friday, its stock dropped almost 14 percent.

Tesla in recent years has become one the most valuable American carmaker, with its stock worth more than $50 billion.

However, The company has been struggling to achieve the ambitious production targets that Musk had publicly outlined.

He has made a series of unusual public comments or appearances, including an internet interview in which Musk appeared to smoke marijuana.

(With inputs from agencies.)