Tesla shares traded down 12 percent in early Friday trading as investors raced to the exits in the wake of a regulatory action that seeks to permanently oust founder, chairman and chief executive Elon Musk.

At the same time, a report surfaced that Musk backed out of an eleventh-hour settlement offer from the Securities and Exchange Commission that would have forced him to step down as chairman for only two years.

The offer, according to CNBC, which first reported on the proposed deal, would have also forced Tesla to appoint two independent board members.

The South African billionaire, however, reportedly could not live with any blemish on his reputation or his company.

It has been a whirlwind 19 hours for the electric car maker — with the SEC filing suit against the 47-year-old entrepreneur, accusing him of misleading shareholders by tweeting last month that he had “funding secured” for a $420-a-share take-private offer.

Musk, days later, backed away from the offer.

In a statement Thursday, Musk said the SEC lawsuit left him “deeply saddened and disappointed.”

“I have always taken action in the best interests of truth, transparency and investors,” Musk said. “Integrity is the most important value in my life and the facts will show I never compromised this in any way.”

Tesla shares on Friday morning were trading at $270.55.