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.More news: Why is Google 'paying' Apple $9 bn?
In any case, the $40 million, which will be distributed to harmed shareholders after a court-approved process, are but a very small fraction of the more than $7 billion lost due to the whole debacle. Musk is now required to step down as chairman of Tesla within 45 days, and he is not permitted to be re-elected to the post for three years.
Separately, Tesla agreed Saturday to pay $20 million to settle claims it failed to adequately police Musk's tweet. Neither Musk nor Tesla admitted or denied the SEC's findings as part of the settlement.More news: Renuka Shahane Stands With Tanushree in Well-Argued Facebook Post
"The resolution is meant to prevent further market disruption and harm to Tesla's shareholders", SEC co-director of enforcement Steven Peikin said.
Musk, a co-founder of Tesla, is the company's largest stockholder, owning approximately 22 per cent of its outstanding shares. The SEC's lawsuit charged that the tweet, which caused Tesla's shares to jump, was misleading because he did not actually have the funding lined up for such a move.More news: Raj Kapoor's wife, Krishna passes away
Musk has courted several controversies in recent times by making a series of unusual public comments or appearances, including an Internet interview in which he appeared to smoke marijuana.