Tesla founder Elon Musk told federal investigators that one of the reasons why he suggested taking the company private at $420 per share was because of the number’s significance in marijuana culture.

Musk spent a day at the end of August answering questions from the Securities and Exchange Commission agency at its office in California. The SEC asked him why he tweetedin August a plan to take Tesla private at $420. His answer was simple: It’s a reference to weed.

“This calculation resulted in a price of $419, and Musk stated that he rounded the price up to $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend ‘would find it funny,’ which admittedly is not a great reason to pick a price,” according to the SEC complaint.

His testimony led the SEC to believe it had an easy case showing that an Aug. 7 tweet from the mercurial Tesla head about taking the company private had violated securities laws, a source told The Wall Street Journal Friday. – READ MORE

Tesla and SpaceX CEO Elon Musk has reportedly reached a settlement with the Securities and Exchange Commission (SEC) after his abandoned attempt to take Tesla private.

As a part of the settlement, which is still subject to court approval, Musk will have to step down from his role as chairman at Tesla for at least three years and pay a civil penalty of $20 million. He will remain as CEO of Tesla during that time period, but Tesla must also appoint two independent directors with no ties to the company to its board.

“As a result of the settlement, Elon Musk will no longer be Chairman of Tesla, Tesla’s board will adopt important reforms —including an obligation to oversee Musk’s communications with investors—and both will pay financial penalties,” said Steven Peikin, who co-directs the SEC’s enforcement division.

Tesla will also pay a separate fine of $20 million, according to the press release. The violations stem from Musk’s tweet last month stating that he planned to take the company private at $420 per share, claiming that he had secured funding for such a deal. – READ MORE

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