Elon Musk will step down from his role as Tesla's board chairman.

According to CNBC, the business magnate agreed to leave the post for three years as part of a settlement with the Securities and Exchange Commission. As previously reported, the SEC filed a lawsuit against Musk earlier this week regarding a "misleading" tweet he posted in August. The Tesla CEO went to the platform claiming he had received adequate funding to take the electric car company private at $420 a share. Telsa stocks rose more than 10 percent following Musk's announcement; however, it was later revealed that said funding was never secured. Shortly after he made the claim, Musk announced his decision to keep the company public.

Regulators accused the inventor of securities fraud.

"Musk knew that the potential transaction was uncertain and subject to numerous contingencies," the SEC wrote in a press release. "Musk had not discussed specific deal terms, including price, with any potential financing partners, and his statements about the possible transaction lacked an adequate basis in fact. According to the SEC’s complaint, Musk’s misleading tweets caused Tesla’s stock price to jump by over six percent on August 7, and led to significant market disruption."

Musk accepted the SEC deal "without admitting or denying the allegations of the complaint." As part of the settlement, which requires court approval, Musk will be forced to pay a civil penalty of $20 million. Telsa will pay the same penalty. The combined $40 million will reportedly be distributed to Telsa's harmed investors.