Musk out as Tesla chair, remains CEO in $40M SEC settlement

Tesla Motors CEO Elon Musk reveals the Tesla Energy Powerwall Home Battery during an event in Hawthorne, California, US, April 30, 2015. (Reuters)
Updated 01 October 2018
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Musk out as Tesla chair, remains CEO in $40M SEC settlement

  • The settlement allows Musk to remain CEO of the electric car company but requires him to relinquish his role as chairman for at least three years
  • The deal was announced Saturday, just two days after SEC filed its case seeking to oust Musk as CEO

SAN FRANCISCO: Tesla and its CEO Elon Musk have agreed to pay a total of $40 million and make a series of concessions to settle a government lawsuit alleging Musk duped investors with misleading statements about a proposed buyout of the company.
The settlement with the Securities and Exchange Commission allows Musk to remain CEO of the electric car company but requires him to relinquish his role as chairman for at least three years.
Tesla must hire an independent chairman to oversee the company, something that should please a number of shareholders who have criticized Tesla’s board for being too beholden to Musk.
The deal was announced Saturday, just two days after SEC filed its case seeking to oust Musk as CEO.
Musk, who has an estimated $20 billion fortune, and Tesla, a company that ended June with $2.2 billion in cash, each are paying $20 million to resolve the case, which stemmed from a tweet Musk sent on Aug. 7 indicating he had the financing in place to take Tesla private at a price of $420 per share.
“A reckless tweet cost a lot of money — the $20-million tweet,” said Michelle Krebs, executive analyst at Autotrader.
The deal could remove one cloud that hangs over Tesla. Investors fretted about the company’s ability to cope without Musk, a charismatic entrepreneur whose penchant for coming up with revolutionary ideas has drawn comparisons to one of Silicon Valley’s most revered visionaries, Apple co-founder Steve Jobs.
Tesla’s stock plummeted 14 percent Friday after the SEC filed its lawsuit, erasing more than $7 billion in shareholder wealth. Many analysts predicted the shares were bound to fall even further if Musk had been forced to step down. Tesla’s stock has dropped 30 percent since Aug. 7, closing Friday at $264.77.
The steep downturn in Tesla’s market value may have influenced Musk to have an apparent change of heart and negotiate a settlement. Musk had rejected a similar settlement offer before the SEC sued Thursday, maintaining he had done nothing wrong when he posted a tweet declaring that he had secured the financing to lead a buyout of Tesla.
The SEC alleged Musk wasn’t close to locking up the estimated $25 billion to $50 billion needed to pull off the buyout.
Musk and Tesla reached their settlement without admitting to or denying the SEC’s allegations.
The resolution “is in the best interests of our markets and our investors, including the shareholders of Tesla,” SEC Chairman Jay Clayton said in a statement.
A Tesla spokeswoman said the company and Musk had no comment Saturday.
Besides paying a fine and stripping Musk of his chairman’s title, Tesla also must appoint two more directors who have no ties to the company or its management. Musk will be allowed to remain on the board.
The company also must clamp down on Musk’s communications with investors, a requirement that might make its colorful CEO’s Twitter posts slightly less interesting.
“Considering the drastic punishment the SEC had announced, Musk and Tesla got lucky,” said Krebs, the Autotrader analyst. “Musk at least remains at the helm of the company, and adding a couple of board members is a good thing.”
The SEC also got what it wanted by bringing the combative Musk down a notch and taking steps to tone down his off-the-cuff remarks while forcing Tesla to expand its board to counterbalance its CEO’s power, said Carl Tobias, a law professor at the University of Richmond. Besides being CEO, Musk owns a roughly 20 percent stake in Tesla.
“Maybe this will make Musk stop acting so crazy and fly right,” Tobias said.
Besides tweeting about a deal that the SEC alleged he didn’t have money to pay for, Musk had been engaging in other erratic behavior that had been raising questions about whether he should remain CEO.
Musk had raised hackles by ridiculing stock market analysts for posing fairly standard questions about Tesla’s shaky finances, and calling a diver who helped rescue 12 boys on a Thai soccer team from a flooded cave a pedophile, triggering a defamation lawsuit. He was also recently caught on a widely circulated video apparently smoking marijuana , a legal drug in Tesla’s home state of California.
The erratic behavior has convinced more analysts that Tesla needs to find a replacement for Musk, but the SEC settlement will allow the company to do so on its own timetable, if it decides to hire a new leader.
Tesla is also under mounting pressure to overcome its past manufacturing problems and produce enough vehicles to become consistently profitable after years of huge losses.
A gauge of the company’s progress should come within the next few days when Tesla is expected to release its vehicle production numbers for the July-September period.
Musk has pledged Tesla would manufacture an average of 7,000 vehicles per week, enough to turn a profit.
Tesla needs to turn the financial corner because it has $1.3 billion in debt coming due during the next six months. If it keeps burning through its cash, Tesla will likely have to raise more money to pay its bills — something that analysts say will be easier to do without any lingering doubt who will be running the company.


Cumin has health benefits but always seek medical consultation first, says SFDA

Updated 1 min 51 sec ago
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Cumin has health benefits but always seek medical consultation first, says SFDA

  • Herbs, like any substance with therapeutic effects, should be used with caution, the authority said
  • Medical consultation is particularly recommended for those with blood clotting disorders or diabetes 

RIYADH: Cumin offers notable health benefits and nutritional value, including aiding digestion and relieving gas, but it should not be used without seeking medical consultation, the Saudi Food and Drug Authority (SFDA) said on Thursday.

Cumin, particularly the Cuminum cyminum species, is an aromatic spice used as a seasoning in food and extracted for its oil for perfumes, and is also a popular remedy in traditional medicine.

But the SFDA emphasized that herbs, like any substance with therapeutic effects, should be used with caution. 

"Medical consultation is essential, as certain herbs may interact with medications or affect nutrient absorption," the authority said in an advisory carried by the Saudi Press Agency.

The SFDA recommended adhering to the recommended daily intake of 1.5 to 3 grams of cumin, noting that one teaspoon is equivalent to 5 grams. 

Cumin may interact with blood thinners and diabetes medications, potentially mimicking their effects and leading to complications, it said.

Medical consultation is particularly recommended for individuals with blood clotting disorders or diabetes, as well as pregnant and lactating women, the SFDA said.

It warned that cumin may induce uterine contractions, increasing the risk of premature birth, and could also affect hormonal balance during pregnancy.

Cumin may also cause acid reflux or diarrhea and could influence milk production in breastfeeding mothers, potentially leading to colic or diarrhea in infants, the advisory warned. 

It further recommended discontinuing cumin consumption at least two weeks before any surgical procedure, as it may increase the risk of bleeding.


Saudi Arabia condemns attacks by ‘outlaw groups’ in Syria 

Updated 18 min 37 sec ago
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Saudi Arabia condemns attacks by ‘outlaw groups’ in Syria 

RIYADH: Saudi Arabia has condemned the targeting of security forces and crimes by “outlaw groups” in Syria, a foreign ministry said early Friday. 

“The Kingdom affirms its support for the Syrian government in its efforts to maintain security and stability and preserve civil peace,” the statement concluded.

Syrian forces were clashing with gunmen loyal to an Assad-era special forces commander in Latakia on Thursday, the province’s security director said, after authorities reportedly launched helicopter strikes.

The fighting killed 48 people on Thursday, a war monitor said.

The Syrian Observatory for Human Rights said the clashes in the coastal town of Jableh and adjacent villages were “the most violent attacks against the new authorities since Assad was toppled” in December.

Pro-Assad fighters killed 16 security personnel while 28 fighters “loyal” to ousted President Bashar Assad and four civilians were also killed, it said.

The fighting struck in the Mediterranean coastal province of Latakia, the heartland of the ousted president’s Alawite minority who were considered bastions of support during his rule.


SpaceX’s latest Starship test flight ends with another explosion

Updated 16 min 28 sec ago
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SpaceX’s latest Starship test flight ends with another explosion

Nearly two months after an explosion sent flaming debris raining down on the Turks and Caicos, SpaceX launched another mammoth Starship rocket on Thursday, but lost contact minutes into the test flight as the spacecraft came tumbling down and broke apart.
This time, wreckage from the latest explosion was seen streaming from the skies over Florida. It was not immediately known whether the spacecraft's self-destruct system had kicked in to blow it up.
The 403-foot (123-meter) rocket blasted off from Texas. SpaceX caught the first-stage booster back at the pad with giant mechanical arms, but engines on the spacecraft on top started shutting down as it streaked eastward for what was supposed to be a controlled entry over the Indian Ocean, half a world away. Contact was lost as the spacecraft went into an out-of-control spin.
Starship reached nearly 90 miles (150 kilometers) in altitude before trouble struck and before four mock satellites could be deployed. It was not immediately clear where it came down, but images of flaming debris were captured from Florida, including near Cape Canaveral, and posted online.
The space-skimming flight was supposed to last an hour.
“Unfortunately this happened last time too, so we have some practice at this now,” SpaceX flight commentator Dan Huot said from the launch site.
SpaceX later confirmed that the spacecraft experienced “a rapid unscheduled disassembly" during the ascent engine firing. "Our team immediately began coordination with safety officials to implement pre-planned contingency responses,” the company said in a statement posted online.
Starship didn't make it quite as high or as far as last time.
NASA has booked Starship to land its astronauts on the moon later this decade. SpaceX’s Elon Musk is aiming for Mars with Starship, the world’s biggest and most powerful rocket.
Like last time, Starship had mock satellites to release once the craft reached space on this eighth test flight as a practice for future missions. They resembled SpaceX’s Starlink internet satellites, thousands of which currently orbit Earth, and were meant to fall back down following their brief taste of space.
Starship’s flaps, computers and fuel system were redesigned in preparation for the next big step: returning the spacecraft to the launch site just like the booster.
During the last demo, SpaceX captured the booster at the launch pad, but the spacecraft blew up several minutes later over the Atlantic. No injuries or major damage were reported.
According to an investigation that remains ongoing, leaking fuel triggered a series of fires that shut down the spacecraft’s engines. The on-board self-destruct system kicked in as planned.
SpaceX said it made several improvements to the spacecraft following the accident, and the Federal Aviation Administration recently cleared Starship once more for launch.
Starships soar out of the southernmost tip of Texas near the Mexican border. SpaceX is building another Starship complex at Cape Canaveral, home to the company’s smaller Falcon rockets that ferry astronauts and satellites to orbit.


Trump casts doubt on NATO solidarity, despite it aiding the US after Sept. 11

Updated 51 min 38 sec ago
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Trump casts doubt on NATO solidarity, despite it aiding the US after Sept. 11

  • Trump also suggested that the US might abandon its commitments to the alliance if member countries don’t meet defense spending targets
  • Last year, NATO’s Secretary-General Jens Stoltenberg said a record 23 of NATO’s 32 member nations had hit the military alliance’s defense spending target

WASHINGTON: President Donald Trump on Thursday expressed uncertainty that NATO would come to the US’s defense if the country were attacked, though the alliance did just that after Sept. 11 — the only time in its history that the defense guarantee has been invoked.
Trump also suggested that the US might abandon its commitments to the alliance if member countries don’t meet defense spending targets, a day after his pick for NATO ambassador assured senators that the administration’s commitment to the military alliance was “ironclad.”
Trump’s comments denigrating NATO, which was formed to counter Soviet aggression during the Cold War, are largely in line with his yearslong criticism of the alliance, which he has accused of not paying its fair share toward the cost of defense. But they come at a time of heightened concern in the Western world over Trump’s cozy relationship with Russian President Vladimir Putin, who has long seen NATO as a threat, and as the US president seeks to pressure Ukraine into agreeing to a peace deal with the country that invaded it three years ago.

US President Donald Trump reacts at the Oval Office at the White House in Washington on March 6, 2025. (REUTERS)

Defense Secretary Pete Hegseth sent the alliance into upheaval last month when he said in a speech that the US would not participate in any peacekeeping force in Ukraine, which is not a NATO member, and would not defend any country that participated in it if attacked by Russia.
Trump said Thursday in the Oval Office that other countries would not come to the defense of the US — though they have done exactly that, in the only instance that the Article 5 defense guarantee was invoked.
“You know the biggest problem I have with NATO? I really, I mean, I know the guys very well. They’re friends of mine. But if the United States was in trouble, and we called them, we said, ‘We got a problem, France. We got a problem, couple of others I won’t mention. Do you think they’re going to come and protect us?’ They’re supposed to. I’m not so sure.”
Article 5 was invoked after the Sept. 11, 2001, attacks, leading to NATO’s largest operation in Afghanistan. France’s military participated in the operation.
“We are loyal and faithful allies,” French President Emmanuel Macron responded Thursday, expressing “respect and friendship” toward US leaders.
“I think we’re entitled to expect the same,” he said.
Macron invoked “centuries-old history,” namechecking the Marquis de Lafayette, a 19-year-old French nobleman, who was a major-general in the American Continental Army during the Revolutionary War, and Gen. John Pershing, commander of the American army in France during World War I. Macron added that a few days ago, he met American World War II veterans who landed on Omaha Beach as part of the D-Day invasion of Nazi-occupied France.
France and the US “have always been there for each other,” Macron said.

France's President Emmanuel Macron gestures as he addresses the media during a press conference in Brussels on March 6, 2025, to discuss continued support for Ukraine and European defense. (AFP)

When asked Thursday if it he was making it US policy that the US would not defend NATO countries that don’t meet military spending targets, Trump said, “well, I think it’s common sense, right? If they don’t pay, I’m not going to defend them. No, I’m not going to defend them.”
Trump has suggested since his 2016 presidential campaign that the US under his leadership might not comply with the alliance’s mutual defense guarantees and would only defend countries that met targets to commit 2 percent of their gross domestic products on military spending.
The US is the most powerful nation of the seven-decade alliance, has the largest economy among members and spends more on defense than any other member.
The US was one of 12 nations that formed NATO following World War II to counter the threat posed by the Soviet Union to Western European during the Cold War. Its membership has since grown to 32 countries, and its bedrock mutual defense guarantee, known as Article 5, states that an attack on one member is considered an attack on all.
Trump on Thursday also seemed to suggest the US commitment to NATO might be leveraged in his trade war as he seeks to target what he says are unfair trade policies with other nations, including the European Union.
“I view NATO as potentially good, but you’ve got to get, you’ve got to get some good thinking in NATO. It’s very unfair, what’s been happening,” Trump said. “Until I came along, we were paying close to 100 percent of NATO. So think of it, we’re paying 100 percent of their military, and they’re screwing us on trade.”
On Wednesday, Trump’s choice for NATO ambassador, Matt Whitaker, said at his confirmation hearing that in regards to the US commitment to the NATO alliance and specifically Article 5, “It will be ironclad.”
Last year, NATO’s Secretary-General Jens Stoltenberg said a record 23 of NATO’s 32 member nations had hit the military alliance’s defense spending target.
Trump has taken credit for countries meeting those targets because of his threats, and Stoltenberg himself has said Trump was responsible for getting other nations to increase their spending.
 


Saudi FM participates in GCC-Jordan ministerial meeting

Updated 07 March 2025
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Saudi FM participates in GCC-Jordan ministerial meeting

RIYADH: Saudi Foreign Minister Prince Faisal bin Farhan participated on Thursday in the seventh GCC-Jordan joint ministerial meeting of foreign ministers in Makkah, the Saudi Press Agency said.

The meeting discussed regional issues including the Palestinian cause and the efforts made to achieve regional security and stability.

It also tackled ways of boosting GCC-Jordanian relations and supporting partnerships.

The meeting was headed by Kuwait’s Foreign Minister Abdullah Al-Yahya.