Tesla founder and CEO Elon Musk will step down as chairman of the electric carmaker for at least three years as part of a settlement with the Securities and Exchange Commission over a security fraud charge stemming from a series of tweets that the SEC believes misled investors.

Musk and Tesla will also each pay $20 million fines as part of the settlement, but did not have to admit any wrongdoing related to the August 7 tweets that saw Musk allege that he had “funding secured” to take Tesla private at a per-share price that was well above its stock price at the time. The stock price subsequently skyrocketed before trading was halted and Tesla remains a public company.

If the penalties are approved by a judge, the total $40 million in fines will be paid out to investors who were “harmed” in the aftermath of the tweets. Tesla has also agreed to add two independent directors to its board as part of the pact.

For Musk, the result could be viewed as a win because he gets to remain Tesla CEO as part of the deal — an outcome that would not have been certain if the case had gone to trial. Whether it tames the famously mercurial entrepreneur is another question.

Aeisha Mastagni, a portfolio manager for the California State Teachers’ Retirement System, a Tesla investor, said she was concerned about the board’s ability to oversee Musk and the company and that she would welcome changes to Tesla’s board.

“I think this board is insular, ripe with conflicts; it’s the poster child for bad corporate governance,” she said.

The board also lacks a director who could take over for Musk, said investment adviser Cornerstone Capital’s research chief, John Wilson. “The problem for investors is that an investment in Tesla is an investment in Elon Musk,” he said.

Musk has hired Stephen Best at Brown Rudnick, who successfully defended internet billionaire Mark Cuban in an insider trading case, according to people familiar with the plans who also asked not to be identified. He also hired former Assistant US Attorney Chris Clark of Latham & Watkins to defend him in the case, the people said.

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