Musk Sees "Victory" Tuesday, SEC Deal: Tesla Jumps

CEO Elon Musk unveils a new all-wheel-drive version of the Model S car in Hawthorne California

In case you haven't been paying attention to the news, Tesla's sort of going through a rough patch at the moment: The electric auto manufacturer's founder, Elon Musk, now has the US Securities and Exchange Commission breathing down his neck, and it's safe to say that the company's seen better days.

Tesla jumped in pre-market trading after Elon Musk settled a United States lawsuit over his take-private tweet storm, reassuring investors that the billionaire will keep calling the shots at the electric-car maker he's said is on the verge of profitability.

Two "independent directors" will also be appointed by Tesla, and the company will set up a new committee of independent directors and "put in place additional controls and procedures to oversee Musk's communications", the SEC said.

Musk said that he had "funding secured" for a buyout of the electric-car company at $420 a share, reports The New York Times.

Musk and Tesla must each pay $20 million in fines, which will be distributed to traders who were harmed by the tweets.

Musk's tweet about taking his company private, along with attacks on critics on social media, raised concerns with investors about whether Musk has become too focused on criticism from so-called short-sellers who had been making bets against him and Tesla.

In a statement, the SEC added that the settlements are subject to court approval and that they would also require comprehensive corporate governance and other reforms at Tesla.

Stephanie Avakian and Steve Peikin, co-directors of the SEC's Enforcement Division, led the talks, taking the reins from the staff attorneys who worked the case, according two people familiar with the matter.

Tesla analyst Garrett Nelson of CFRA Research upped his rating on the stock Monday morning to Hold, after downgrading it on Friday to Sell. However, at the last moment he changed his mind, and in turn the SEC filled a lawsuit claiming that "Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source".

"Shareholders with Tesla will be able to go to sleep tonight knowing the Musk will remain at the helm of the company".

Musk, whose tweets on August 7 on a plan to take Tesla private that was later abandoned, has tweeted only once since the settlement was announced - posting a music video by rap group Naughty by Nature.

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