Elon Musk no longer Tesla chairman, keeps CEO title

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The case focused on Musk's claims in August that funding had been secured for a plan to buy out Tesla's publicly traded shares at a price of $420 and take the company private.

Under the settlement announced over the weekend, Tesla and Musk will pay US$20 million each to the regulator and Musk will step down as chairman but stay as chief executive officer, leaving in place one of America's best-known corporate figures.

SEC has also charged Tesla for failing to have the required disclosure control and procedures over Musk's tweets. In the settlement, Elon Musk is to pay a $20 million fine and Tesla will also pay a similar amount separately, totalling the fines to $40 million.

Tesla will now be appointing two new independent directors to its board. The money will be distributed to investors harmed by Musk's tweet and the wild market swings that happened during the whole debacle.

Tesla has turned to an army of volunteers to help it meet ambitious third quarter auto production targets after a bruising few days for chief executive Elon Musk, who was forced to pay $20m in order to settle a dispute with USA regulators.

"The resolution is meant to prevent further market disruption and harm to Tesla's shareholders", Peikin added.

"The SEC's complaint alleged that, in truth, Musk knew that the potential transaction was uncertain and subject to numerous contingencies".

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KitGuru Says: Many had taken Musk's $420 reference to marijuana as a joke given his recent experience with the substance, however his position of responsibility makes comments about his business a hard subject, especially given its effects on the stock market.

Musk will step down as chairman of Tesla for three years, starting in November.

Elon Musk Tweet: The Reckless, Expensive Tweet!

In response to this current wave of bustle, the company, as well as Musk, haven't released any statement or tweet.

As such, the company was also implicated in Musk's actions.

After filing the lawsuit, SEC officials were anticipating a drawn-out legal battle, but settlement talks started up again late Friday after Musk's attorney Steven Farina sent an email asking to reopen the discussions.