As part of the settlement, Tesla will appoint an independent chairman, two independent directors, and a board committee to set controls over Mr Musk's communications under the proposed agreement.
Musk's "funding secured" tweets were made on 7 August, and claimed that he was planning to take the company private at a price of $420 per share - a premium of just over 20 per cent of the company's stock price (which has since nose-dived) at the time.
Shares of Tesla Inc (TSLA.O) jumped 18 percent on Monday as signs it had met targets for quarterly production numbers added to relief at Chief Executive Elon Musk's settling a lawsuit with regulators that could have forced him out.
Shares of Tesla Inc jumped almost 15 percent on Monday after Chief Executive Elon Musk settled a lawsuit from the US Securities and Exchange Commission (SEC) that sought to remove him from company management. Achieving those milestones would be a rebuke to may on Wall Street who have insisted that Tesla would need to raise additional funds in the coming months. Musk won't be eligible to be re-elected as chairman for three years.
He accepted the deal with the SEC "without admitting or denying the allegations of the complaint", according to a court document. "The resolution is meant to prevent further market disruption and harm to Tesla's shareholders", said SEC enforcement division co-director Steven Peikin.
In the immediate aftermath of the "funding secured" tweet, Tesla stock rose by six per cent.
You see, even with offerings like the Toyota Prius and Nissan Leaf, the idea of a market-friendly electric vehicle that's both stylish and fun-to-drive has never been more mainstream than it has with Musk and Tesla leading the charge.
Analysts from Cowen wrote in a note over the weekend that while the settlement would likely lead to a near-term bump for Tesla shares, it could leave Musk open to future litigation - including class-action lawsuits that have already been filed. Some analysts had said that Musk's departure would harm Tesla's brand, fundraising abilities and stakeholders' confidence if the company lost its key visionary.