SAN FRANCISCO, Calif. (CBSNewYork/AP) — 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.

Regulators alleged Musk’s statements, disseminated via Twitter, “falsely indicated that, should he so choose, it was virtually certain that he could take Tesla private at a purchase price that reflected a substantial premium over Tesla stock’s then-current share price.That funding for this multi-billion dollar transaction had been secured, and that the only contingency was a shareholder vote.” In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source.”

The charge against Musk was the latest blow in confidence to the company leader.

Earlier this month, David Morton, chief accounting officer at Tesla, called it quits after just a month on the job. The controversy is over Elon Musk taking a hit off an apparent marijuana-tobacco joint during a podcast interview that made its rounds on YouTube. And the stock dropped more than 6 percent Friday to close at $263.24 a share — its lowest point since April.

(© Copyright 2018 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)