Tesla Inc. announced to its investors that its settlement with the U.S. Securities and Exchange Commission (SEC) could mean a financial windfall. The electric car maker is at the center of a high-profile dispute with the SEC over the management of the company and how it reports financial results.
The dispute has, at times, been quite heated. The SEC demanded that Tesla pay a fine, but Tesla decided to fight this decision. Tesla argued that it had gone out of its way to be open and transparent, and that the SEC had no grounds for demanding a fine.
The case has now been settled and it seems that investors in Tesla could be in line for a financial payout as a result. Tesla has agreed to pay a $20 million dollar fine, which it believes is in the best interests of its shareholders. The company also believes that its settlement could result in a financial benefit for both existing and former shareholders who purchased Tesla stock between May 7, 2014 and September 18, 2019.
Tesla investors could receive a payout on the order of $1 billion or more, depending on the number of approved claims. The money received will be paid out in the form of cash or Tesla stock, depending on the individual investor’s preference.
The details of the payout have yet to be finalized. It is also not yet known when the payments will be made, although it is expected to be some time in 2020.
The settlement between Tesla and the SEC will allow the company to move forward with more financial and business transparency. It is hoped that this settlement will help put the disputes of the past behind the company and will lead to greater trust between investors and the company.
For investors, the availability of the payout from the SEC settlement is an unexpected and welcome surprise. It suggests that Tesla is serious about its commitment to transparency and investors will no doubt be pleased with the potential financial benefit of the settlement. It will be interesting to see what the total payout will be and when the money will be distributed to investors.
