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Tesla’s SEC Deal Provides Ammunition For U.S. Probe, Investor Lawsuits

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Tesla's SEC Deal Provides Ammunition For U.S. Probe, Investor Lawsuits

Tesla Inc’s settlement with U.S. regulators will help soothe investors calling for more oversight of Chief Executive Elon Musk, experts said, even as it gives ammunition to short-sellers pursing separate cases and to a probe by the Justice Department.

Musk and Tesla will pay $20 million each, bring in two independent directors and have the billionaire step down as board chairman to settle U.S. Securities and Exchange Commission charges that Musk misled investors by tweeting he had financing for a go-private deal.

That settlement must still be approved by a court, and does not end the Justice Department probe disclosed by Tesla into Musk’s tweets or lawsuits by short-sellers and other investors alleging losses and securities law violations.

“The real worry for the company is not the SEC but private actions that follow a settlement like this,” said Charles M. Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware. “By paying that size fine, it bolsters investors’” claims over stock market losses, he said.

Neither Musk nor Tesla admitted or denied the SEC’s findings as part of the settlement.

Musk settled with the SEC after advisers persuaded him the terms were favorable and a lengthy court fight would not be in the best interest of the company, a person familiar with the deal said. Musk had wanted to personally pay the fine for money-losing Tesla but the SEC rejected that proposal, the person said.

Tesla shares plunged around 14 percent on Friday, the day after the SEC charged Musk with misleading investors, and are down 30 percent since his Aug. 7 tweet saying he was considering taking the company private at $420 a share.

Investor claims could result in substantial settlements in cash or equity, Elson said. An equity settlement could end up diluting Musk’s roughly 19 percent stake in Tesla, further reducing his influence on the board.

Still, Tesla shares could stabilize on Monday on investor relief that the penalties were not higher and that the public face of Tesla will remain in the CEO role under added oversight, analysts said.

Tesla is expected to release third-quarter production this week, and investors are watching to see if it hit targets for the Model 3, a high-volume car. Whether Tesla made a profit likely will not be known until it reports financial results for the quarter.

The settlement disclosed by the SEC on Saturday “is a positive outcome for Elon Musk, Tesla and ultimately shareholders,” wrote RBC Capital Markets analyst Joseph Spak, who added he expects Tesla shares to recoup some of their losses from last week.

An expanded board and new chairman offers hope “a true check on Elon will emerge and there will be greater accountability” over Musk’s statements and business targets, Spak added.

Tesla and Musk ended up accepting harsher penalties than the SEC originally proposed to settle the claims, according to the person familiar with the deal. The SEC initially was ready to accept a fine of a few million dollars and Musk’s removal as chairman for two years, but raised its demands after Musk balked at that offer, the person said.

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Business News

Experts Support Trade Multilateralism

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Experts Support Trade Multilateralism

Several experts from different countries have voiced their support for multilateralism in trade.  They particularly pointed to china’s actions to promote cooperation based on win-win results.

Sanusha Naidu, a foreign policy analyst based in South Africa, said the recent G-20 summit has told the world the significance of multilateralism in trade which has played an active role for the global economy.

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World News

150 Nations Sign International Agreement On Migration

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150 Nations Sign International Agreement On Migration

More than 150 nations have signed a landmark international agreement on managing migration.

The UN pact, which is not legally binding, was adopted at a meeting in Marrakesh, Morocco, but it has been shunned by some countries including the U.S., Australia and at least six EU nations.

Its objectives include the integrated management of borders and giving migrants access to basic services.

Critics fear it will increase migration but the UN Secretary General Antonio Guterres said the pact was based on co-operation and regulating migration.

He called it a source of “collective shame” that 60,000 migrants had died on perilous journeys since 2000.

All 193 UN members, except the united states, finalised the pact five months ago

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Nigerian News

Nigeria Remains Third Most Terrorized Country In The World

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Nigeria Remains Third Most Terrorized Country In The World

Nigeria still holds the unenviable position as the third most terrorized country in the world.

The 2018 global terrorism index, released on Wednesday, says  this is as a result of the spate of terrorism in Nigeria.  It also points to what it called the “increase in violence involving Fulani extremists”.  The report says this is happening as deaths committed by Boko Haram are falling..

Nigeria is ranked only below Iraq and Afghanistan, both in first and second positions.

This year alone, hundreds of Nigerians have been killed in attacks by suspected herdsmen as well as clashes between the herders and farmers/communities.

States worst hit in the attacks are Plateau, Benue, Zamfara, Taraba and others.

The report also noted that, compared to the peak of “terrorist deaths” in 2014, “the largest falls in the number of deaths occurred in Iraq, Nigeria, and Pakistan.

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