Tesla chief Elon Musk's SEC settlement: What experts are saying

Elon Musk bowed to demands from America’s financial markets watchdog to give up his position as chairman of Tesla

The electric auto maker is expected to report third-quarter production numbers on Tuesday, following a period of turbulence, including a run-in with securities regulators that culminated in Musk being ousted as Tesla's chairman and hit with a multimillion-dollar fine.

Musk has agreed to pay out the $20 million fine.

As part of a settlement with the US Securities and Exchange Commission, Tesla will hire an independent chairman and two non-executive directors and will create a board-level committee to oversee Mr Musk's communications.

Whoever becomes the new chairperson of Tesla Motors will face the formidable task of reining in Elon Musk, the charismatic, visionary chief executive with an impulsive streak, while also helping Musk achieve his dream of turning Tesla into a profitable, mass-market producer of environmentally friendly electric cars.

The shares closed at $307.52 on Thursday before the SEC announced its enforcement action over the tweets, in which Musk said he had "funding secured" to take the company private at $420 a share.

"The $40 million in penalties will be distributed to harmed investors under a court-approved process", the SEC said.

The charges come after Musk claimed in August via a series of tweets that he was planning to take the electric auto maker private, and implied that such a move was imminent with "funding secured".

Musk, 47, told employees in an email on Sunday that the company was "very close to achieving profitability and proving the naysayers wrong", but still needed to execute on the last day of the quarter.

It ends a case that began in August, shortly after the publications made by Elon Musk and that ended up not having any progress, and the company maintained its position in the stock market.

Many see the forced changes as being positive for Tesla, partly because the mercurial Musk will now have someone to answer to, and partly because his reduced role may allow the chronically overworked CEO to focus more. Along with leaving, Musk has to pay a $20 million fine for a tweet he fired off saying he planned on a massive buyout of Tesla.

While the 15-year-old company has never earned an annual profit, Tesla's CEO has vowed it's the verge of making money and stemming cash burn that's exceeded more than $1 billion in recent quarters.

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