Tesla CEO Elon Musk, the company’s largest shareholder, intends to buy another $20 million in common stock, a move that appears to be in response to a recent settlement with the U.S. Securities and Exchange Commission, according to a filing Wednesday.
The 8-K document detailed a settlement agreement between Musk, Tesla and the SEC over allegations of securities fraud connected to his August 7 “funding secured” tweet about taking the electric automaker private. A federal judge approved the settlement Tuesday.
At the bottom of the 8-K, Tesla outlined Musk’s plans to buy $20 million in stock. The statement read:
Separate and apart from the settlement, Elon has notified Tesla that he intends to purchase from Tesla, and Tesla expects that it will issue and sell to Elon, $20 million of Tesla’s common stock during the next open trading window at the then-current market price.
As part of the settlement, Musk has agreed to pay a $20 million fine and step down as chairman of the board for at least three years. He will still keep a board seat and has not admitted or denied any of SEC’s allegations.
Tesla will pay a separate $20 million fine. The company also agreed to monitor and pre-approve Musk’s communications through channels such as Twitter and the Tesla blog to determine if any of the information is material, and thereby should be disclosed.