Judge Approves $41.2M Payout From Elon Musk & Tesla’s 2018 Settlement With The SEC

Back in 2018, following an onslaught of attacks from short-sellers, Elon Musk had decided to delist After 3 and a half years since Elon Musk and Tesla paid $40 million to settle Musk’s “funding secured” tweet, the SEC will finally be dispersing the funds to Tesla investors. The move comes following a decision by Judge Alison Nathan of U.S. District Court, Southern District of New York.

Judge Approves $41.2M Payout From Elon Musk & Tesla’s 2018 Settlement With The SEC

Back in 2018, following an onslaught of attacks from short-sellers, Elon Musk had decided to delist Tesla from the New York Stock Exchange and turn it into a private company.

And in August of the same year, Elon Musk wrote on Twitter his now infamous words saying “Am considering taking Tesla private at $420. Funding secured.”

Following that, Tesla started preparations to take the company private. At the time of Musk’s tweet, Tesla stock was trading around $320 per share. But, soon after the share price skyrocketed to above $400.

However, ultimately Tesla board members convinced Elon Musk to walk back his decision and Tesla ended up staying a public company. Following this reversal, Tesla’s stock price plummeted, the U.S Securities and Exchange Commission (SEC) started investigating Musk for the “funding secured” part of his tweet, and a class-action lawsuit was filed by investors who claimed Musk’s tweet had caused them financial harm.

The SEC investigation started to fuel rumours that Musk might be forcefully pushed out from his Tesla CEO position. This further harmed the EV maker’s stock price and according to Musk in order to put the entire saga behind him, he reached a settlement with the SEC.

In the settlement, Musk agreed to give up his Tesla chairman position and to have his tweets pre-approved by a lawyer. Musk and Tesla also paid $20 million each to the SEC to be dispersed to Tesla investors who bought Tesla stock around Musk’s tweet.

Tesla and Musk paid $40 million to the SEC in 2018. However, more than 3 and a half years after the settlement, the SEC has yet to disperse the funds to Tesla investors.

And today, Judge Alison Nathan finally approved the distribution plan. Meaning, after 3 and a half years, Tesla investors can finally receive what they are owed. Due to interest, the settlement amount has grown from $40 million to $41.2 million. However, as of now, it’s not exactly clear who is getting how much money.