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Illustration: Sarah Grillo/Axios

Elon Musk has reached a settlement with federal regulators, which had sued him on Thursday for making misleading material statements. He will get to remain as Tesla's CEO, but must step down as chairman.

The bottom line: This is a smart decision for both Musk and Tesla, as a drawn-out court case would have clouded both of their futures for months to come.

The background: Musk got into hot water for tweets related to his efforts to take Tesla private, particularly claiming that he had "funding secured" at $420 per share, even though the SEC claims he never discussed that specific price with prospective investors.

  • Musk reportedly had been ready to settle with the SEC last week, but then backed out of the deal because he felt the charges were unjustified.
  • The SEC responded with a lawsuit, which could have resulted in him being barred from serving as an officer or director of any public company for years.

Tesla has been struggling to show it can sustainably continue expanding production of the Model 3 sedan that’s critical to the company’s future.

Settlement details: Musk gets to remain as CEO, but within 45 days must step down as chairman for a period of three years. He also must pay a $20 million penalty, and comply with new company procedures for any future communications related to Tesla, including via his Twitter account.

  • Musk neither admits nor denies the allegations brought forth by the SEC.

Tesla, which was not a defendant in Tuesday's lawsuit, also will be required to pay a $20 million penalty, and add two new independent directors. Those details are included in a separate settlement from the one posted below, which is only with Musk.

Thought bubble: Kelly Blue Book executive analyst Rebecca Lindland writes, "A new chairman will also provide much needed guidance and the new board members governance to Tesla as a company and allow Elon to continue with his vision of changing the face of mobility."

  • Elon can’t just replace himself with a chairman of his choosing — the company has to appoint an independent chairman. Tesla has to hire a Securities Counsel whose job it will be to vet all Elon tweets before they go out.

Go deeper: Elon Musk throws a Tesla tantrum

Go deeper

Harry and Meghan accuse British royal family of racism

Photo: Joe Pugliese/Harpo Productions via Reuters

Prince Harry and Meghan Markle delivered a devastating indictment of the U.K. royal family in their conservation with Oprah Winfrey: Both said unnamed relatives had expressed concern about what the skin tone of their baby would be. And they accused "the firm" of character assassination and "perpetuating falsehoods."

Why it matters: An institution that thrives on myth now faces harsh reality. The explosive two-hour interview gave an unprecedented, unsparing window into the monarchy: Harry said his father and brother "are trapped," and Markle revealed that the the misery of being a working royal drove her to thoughts of suicide.

Updated 3 hours ago - Axios Twin Cities

In photos: Thousands rally for George Floyd ahead of Derek Chauvin's trial

Demonstrators on March 7 outside the Hennepin County Government Center, where the trial of former Minneapolis police officer Derek Chauvin, charged with murdering George Floyd, will begin in Minneapolis, Minnesota. Photo: Chandan Khanna/AFP via Getty Images

Thousands of protesters marched through Minneapolis' streets Sunday, urging justice for George Floyd on the eve of the start of former police officer Derek Chauvin's trial over the 46-year-old's death, per AFP.

The big picture: Chauvin faces charges for second-degree murder and manslaughter over Floyd's death last May, which ignited massive nationwide and global protests against racism and for police reform. His trial is due to start Monday, with jury selection procedures.

Caitlin Owens, author of Vitals
7 hours ago - Health

Pfizer CEO feels "liberated" after taking COVID vaccine

Pfizer CEO Albert Bourla. Photo: "Axios on HBO"

Pfizer CEO Albert Bourla tells "Axios on HBO" that he recently received his first of two doses of the company's coronavirus vaccine.

Why it matters: Bourla told CNBC in December that company polling found that one of the most effective ways to increase confidence in the vaccine was to have the CEO take it.

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