"A court must make a 'minimal determination of whether the agreement is appropriate' before entering a consent order," US District Court Judge Alison Nathan wrote. "No later than October 11, 2018, the parties shall file a joint letter not to exceed ten pages, double spaced, explaining why the court should approved the proposed consent judgment."
Musk and the SEC have agreed to settle an SEC lawsuit alleging that Musk misled investors by claiming to have secured financing to take Tesla private.
The proposed settlement requires Musk to step down as Tesla's chairman for three years, while allowing him to remain the company's chief executive officer. In addition, Musk and Tesla must pay a penalty of $20 million.
READ MORE: SEC Sues Elon Musk for Securities Fraud
On August 7, Musk via Twitter said he could take the California-based company private at a price of $420 per share just as the stock was trading at around $358 per share. Tesla's stock price increased by more than six percent from the time of Musk's tweet until the close of trading that day on the NASDAQ exchange.