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Legal, governance challenges persist for Tesla

Joe Mont | November 7, 2018

With a settlement brokered with the Securities and Exchange Commission in its rear-view mirror, Tesla now faces new controversies as the Justice Department and disgruntled investors circle their wagons.

In September, the SEC sued Tesla for online comments made by CEO Elon Musk about possibly taking the publicly traded company private. The Commission, citing a lack of evidence that any such deal was a reality, sued the company in the U.S. District Court for the Southern District of New York on charges that the post misled investors.

On Oct. 16, U.S. District Judge Alison Nathan approved the resulting settlement. Without admitting or denying any of the SEC’s allegations, Tesla and Musk agreed to each pay a civil penalty of $20 million.

As part of the deal, there will be no restriction on Musk’s ability to continue to serve as Tesla’s CEO. There will also be...

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