Tesla and the Securities and Exchange Commission were very close to a no-guilt settlement Thursday, reported CNBC’s Andrew Ross Sorkin on Friday, citing sources. But, these people say Musk pulled out of the agreement at the last minute.
Under the terms of the deal, Musk and Tesla would have had to pay a nominal fine, and he would not have had to step down as an officer. Musk reportedly refused to sign the deal because he felt that by settling he would not be truthful to himself, sources said.
Tesla was not immediately available for comment.
Musk said Thursday the SEC’s allegations are “unjustified” and that he acted in the best interests of investors.
The SEC sued Tesla Thursday afternoon for fraud over a comment Musk made on Twitter on Aug. 7, where the billionaire said he was planning to take the company private and had secured funding for the deal. It would have been the largest such transaction of its kind.
Musk called off his plans to take Tesla private on Aug. 24.
Shares of Tesla were down more than 11 percent Friday morning in premarket trading.