Elon Musk will be resigning as the Chairman of Tesla (NASDAQ:TSLA).

The reason for Elon Musk’s resignation has to do with a recent settlement with the U.S. Securities and Exchange Commission (SEC). This agreement has Musk paying up $20 million in fines and leaving the Chairman role behind.

Due to the settlement with the SEC, Elon Musk will have to resign as the Chairman of Tesla within 45 days. The TSLA CEO also isn’t allowed to attempt reelection for the position for three years due to the agreement.

All of this has to do with a Tweet that Elon Musk sent out back in early August. This tweet was about taking Tesla private for a price of $420. The lawsuit against him alleges that this was misleading for investors of TSLA stock. Musk’s settlement has him neither confirming or denying the lawsuit’s claims.

Tesla is also paying out a $20 million fine as part of the lawsuit against Elon Musk. This is because the company wasn’t monitoring his Tweets close enough. TSLA made clear in 2013 that it would use Musk’s Twitter (NYSE:TWTR) account to supply investors with news about the company, which is why the tweet about taking the company private could been seen as misleading.

The SEC says that the $40 million from the settlement will go to covering damages for investors of TSLA stock. Other parts of the agreement including the appointment of two new independent directors to the company’s Board. A new committee of independent directors will also be created to monitor Musk’s communication channels.

TSLA stock was up 16% as of Monday morning.

As of this writing, William White did not hold a position in any of the aforementioned securities.