Elon Musk resigns as Tesla chairman, told to pay $30m

CHICAGO, IL - JUNE 14: Engineer and tech entrepreneur Elon Musk of The Boring Company listens as Chicago Mayor Rahm Emanuel talks about constructing a high speed transit tunnel at Block 37 during a news conference on June 14, 2018 in Chicago, Illinois. Musk said he could create a 16-passenger vehicle to operate on a high-speed rail system that could get travelers to and from downtown Chicago and O'hare International Airport under twenty minutes, at speeds of over 100 miles per hour. (Photo by Joshua Lott/Getty Images)
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Elon Musk's Twitter habits have finally caught up with him.

The tech entrepreneur will resign as chairman of Tesla and pay millions in fines after tweets he made in August in which he said he was considering taking the company private.

He wrote that he had secured funding to take Tesla into private ownership, which would value the company at $420 per share.

The Securities and Exchange Commission (SEC) announced on Thursday (local time) it would sue Mr Musk for alleged securities fraud. He allegedly turned down an initial deal at the last minute.

The SEC said his claims about funding were "false and misleading".

"In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source," it said.

Mr Musk has now reached a settlement with the SEC which gives him 45 days to leave his role as chairman of Tesla, a position to which he cannot be re-elected for three years.

The SEC initially wanted to ban him from working on the board of any publicly traded company, but under the new settlement he will stay on as Tesla's CEO.

An independent chairman will now be appointed for the company.

Mr Musk will also pay US$20m (NZ$30.2m) in fines, while Tesla itself will pay another US$20m.

After causing several controversies over his Twitter usage, Mr Musk will now have to comply with company protocol when tweeting about Tesla. The company will hire a lawyer to essentially keep an eye on his tweets.