Elon Musk’s Twitter penalty — a cool $40 million.

Settlement over threat to take firm private

A U.S. judge on Tuesday approved a settlement between a federal regulator, Tesla

Inc. and its CEO, Elon Musk, over his tweets promising to take the company private.

Tesla shares are down more than 20 per cent since Aug. 6, the day before Musk said on Twitter he would take the company private and claimed he had secured funding to do so.

Under an agreement with the U.S. Securities and Exchange Commission, Musk has agreed to pay a US$20million fine and step aside as Tesla’s chair for three years to settle charges that could have forced his exit from Tesla. The firm will also pay a US$20million fine, despite not being charged with fraud.

Under the settlement announced on Sept. 29, Tesla must appoint an independent chair, two independent directors and a board committee to control Musk’s communications.

Twitter has frequently been Musk’s go-to venue for freewheeling communications and confrontation with Tesla’s critics.

The stock dropped last month after the SEC accused Musk, 47, of fraud over his “false and misleading” tweets on Aug. 7. On Oct. 4, just hours after U.S. District Court Judge Alison Nathan ordered him and the SEC to explain why their settlement was fair and reasonable, Musk appeared to mock the SEC on Twitter.

“Just want to that the Shortseller Enrichment Commission is doing incredible work,” Musk, a frequent critic of the investors who have bet against the company, wrote. “And the name change is so on point!”

Musk has gained legions of fans for his bold approach to business and technology, using his 23 million Twitter followers to promote Tesla, his rocket company SpaceX, and tunnel venture Boring Co.

But the Aug. 7 claim that he had the funding to take Tesla private, and a subsequent U-turn, stunned Wall Street and came as Musk was filmed briefly smoking marijuana during a live Web show and when he called a British diver in the Thai cave rescue a “pedo.”