Tesla soars after Musk settles fraud suit.
Channel: Vishal Verma
Date: 01/10/2018

By Carlo Versano

Shares of Tesla jumped more than 15 percent in the pre-market Monday on news that CEO Elon Musk settled a lawsuit with the SEC over Musk's social media use.

Under the terms of the settlement, Musk will step down as chairman of Tesla ($TSLA) for at least three years but can remain in the chief executive role. He and the company must each pay $20 million in fines. Two independent board members will also be appointed.

Federal regulators sued Musk last week, arguing that his infamous Aug. 7 "funding secured" tweet amounted to securities fraud. The lawsuit was filed after Musk reportedly scuttled a last-minute deal with the agency under which he would resign as chairman and pay a fine but not admit to any wrongdoing. Talks restarted soon after, and by Saturday a new settlement was in place.

The settlement takes care of one major headache for investors, who will now look to the car maker's third-quarter production and delivery numbers, which may be reported as early as Monday. Musk reportedly emailed employees over the weekend, telling them to "ignore all distractions" and that the company was approaching profitability.