Judge tells Tesla, SEC to justify settlement of fraud lawsuit

(Reuters) - A New York district court judge has asked Tesla Inc Chief Executive Officer Elon Musk and the U.S. Securities and Exchange Commission to provide a joint statement by Oct. 11, explaining why their settlement should be approved.

Shares of the company fell 5 percent to $280.03 in afternoon trading on Thursday.

Tesla and Musk have agreed to pay $20 million each to the regulator under a settlement for a securities fraud lawsuit related to Musk's Aug. 7 tweet about taking the electric carmaker private, in which he said he had funding "secured".

As part of the settlement, Musk will also step down as the company's chairman but remain chief executive.

The SEC charged Musk with misleading investors with the tweet, saying it had no basis in fact.

"The Court has a duty to ensure the proposed consent judgment is "fair and reasonable", Judge Nathan wrote in the order, numbered 18-cv-08865-AJN.

The SEC and Tesla did not immediately respond to request for comment.

Separately, the company said http://bit.ly/2RpaRU1 it would publicly release accident figures for its vehicles on a quarterly basis.

(Reporting by Sonam Rai in Bengaluru; editing by Patrick Graham and Anil D'Silva)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)