Elon Musk has reached a deal over fraud charges that will see him step down as electric automaker Tesla’s chairman of the board and pay a $20 million fine, US securities regulators said Saturday. The Securities and Exchange Commission (SEC) said in a statement:

“The settlements, which are subject to court approval, will result in comprehensive corporate governance and other reforms at Tesla – including Musk’s removal as Chairman of the Tesla board – and the payment by Musk and Tesla of financial penalties of $20 million each.”

Why Elon Musk has been fined $20 million

Musk – who will remain CEO of Tesla – will be ineligible to serve as chairman of the board for a period of three years and will be replaced by an “independent chairman,” while two “independent directors” will also be appointed by Tesla, the SEC said.

The SEC had charged Musk with securities fraud, alleging that he misled investors when he tweeted on 7 August that he had “funding secured” to privatize the electric automaker at $420 a share, causing a brief spike in Tesla’s share price.

Things could ultimately have been significantly worse for Musk, as the SEC had sought to bar him from serving as an officer or board member of a publicly traded company.

The fraud case had piled fresh troubles on Tesla and Musk as the brash CEO, often praised as visionary, faces increased scrutiny over his volatile behaviour that has included smoking marijuana during a podcast interview and assailing a man involved in the Thailand cave rescue as a “pedo guy.”

Net worth: Here’s how much money Elon Musk has

However, despite him seemingly “getting off lightly”, the whole saga has taken a toll on his personal fortune. City Press report that the Bloomberg Billionaires Index estimate his losses to be around the $4 billion (R56 billion) mark, ever since his infamous tweet about Tesla’s shares.

Now that’s what you call a costly mistake – in fact, $1.5 billion of that amount was lost in one day. When the SEC pressed charges against Musk on Friday, his net worth took a huge hit. As of Sunday 30 September, the Pretoria-born entrepreneur has $21.6 billion (just over R300 billion) in the bank.

Shame. And this is what he calls a tough week, hey?