The tweets were "false and misleading" according to the SEC, because Musk hadn't discussed or confirmed key terms of the deal before announcing it.
The billionaire seems to be back to his usual antics after a $20 million settlement with the Securities and Exchange Commission. Now, almost half a year later, it looks like tequila could be the latest in Tesla's arsenal of merchandise it sells to fans.
It is now up to the U.S. District Judge Alison Nathan in Manhattan to determine if the proposed punishments are suitable. The stock has sold off more recently in no small part thanks to Musk's tweets in August about taking the company private.
Musk is the public face of Tesla, and any chairman would have to contend with his powerful personality.
Tesla has until November 13 to appoint an independent chairman of the board, part of settlements reached last month between Tesla, Musk and USA regulators in the wake of Musk tweeting in August that he had secured funding to take the company private.
"The question when it comes to James Murdoch is, 'Is he the guy who'll be able to establish that level of authority with Elon Musk?'" asked Abby Adlerman, CEO of Boardspan, a corporate governance consulting company.
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Initially rejecting an SEC offer to settle the case, Musk relented two days after the fraud complaint and agreed to resolve the matter by paying the penalty, stepping down as chairman and agreeing to oversight about his communications on company news.
Chester Spatt, finance professor at Carnegie Mellon University and former SEC economist, said the shareholder vote requirement shows the SEC is protecting investors.
"Just want to [sic] that the Shortseller Enrichment Commission is doing incredible work", Musk, a frequent critic of investors betting against the electric vehicle company, wrote.
He has also found himself accused of libel after he claimed on more than one occasion that one of the British divers who helped rescue the Thailand boys football team trapped in a cave of being a pedophile.
Spatt said Musk insulting the SEC was "boneheaded", but didn't violate securities laws. Musk remains CEO of Tesla.