Tesla shares soar 16% after Elon Musk settles fraud lawsuit with regulator

Tesla CEO Elon Musk reaches a settlement with the Securities and Exchange Commission after the agency filed a lawsuit against him; Facebook accounts of 50 million people have been compromised by hackers.

Avakian and Peikin demanded that Musk pay $20m and be removed as Tesla's chairman for at least three years, harsher terms than were being offered in the scrapped deal, people familiar with the matter said.

Shares of Tesla Inc jumped almost 15 percent on Monday after Chief Executive Elon Musk settled a lawsuit from the US Securities and Exchange Commission (SEC) that sought to remove him from company management.

Shares of Tesla (TSLA) surged in early trading Monday after the SEC settled a lawsuit accusing the company's founder and CEO Elon Musk of defrauding investors when he tweeted last month that he was considering taking the company private.

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.

Tesla, which has repeatedly fallen short of its own manufacturing targets, probably will finish the quarter making 53 457 Model 3s, according to the Bloomberg Tracker, an experimental tool to monitor the rollout by using vehicle identification numbers to estimate production in real time.

Moreover, Both Tesla and Musk will pay $20 million in fines that will be distributed in a court-approved process to the investors that were potentially harmed by Musk's Twitter activity. The funding had not been secured.

But several experienced litigators said on Monday that, while the DOJ probe is separate, the SEC's settlement could mark the end of official action against Tesla and Mr Musk.

Tesla will now be appointing two new independent directors to its board.

The Model 3 is seen by analysts as crucial to the carmaker's long-term prospects and Musk has promised the ramp-up will help make the company profitable in the third quarter. Later in the weekend, he added that "we are very close to achieving profitability and proving the naysayers wrong, but to be certain, we must execute really well" on Sunday. According to SEC, this settlement will assist Tesla to strengthen its corporate governance and protect its investors.

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