The Securities and Exchange Commission verified that it had, in fact, not changed its name to align with Musk's tweet.
Musk was reportedly encouraged to reach an agreement by Mark Cuban, who settled insider trading charges from the SEC five years ago.
In a tweet referring to the SEC as "Shortseller Enrichment Commission", Musk wrote sarcastically that the regulator was "doing incredible work".
The deal also requires Tesla's board to "establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk's communications".
U.S. district judge Alison Nathan had earlier in the day requested Musk and the SEC send an explanation of the deal in a joint letter by 11 October, justifying why it was fair and in the public interest.
His extraordinary slap at federal regulators comes as U.S. District Judge Alison Nathan in Manhattan said on Thursday that Musk and the SEC would have one week to justify their settlement to resolve securities fraud charges against the CEO.
The SEC had alleged that Musk did not have the estimated $25-50bn needed to make that deal happen.
It's thought that both sides will argue that removing Musk will damage the company's stock, which already dropped 2 per cent after the Tweet. Musk agreed to pay a $20 million fine and step aside as chairman for three years.
Musk doubled down on the tweet shortly after.
In Musk's case, the suggested price of $420 - which was reportedly published simply in order to amuse his girlfriend - set Tesla's valuation at roughly $70 billion, far beyond market cap.
Another reason for Tesla's decline on Friday is likely hedge fund manager David Einhorn's criticism of the automaker in his quarterly letter to investors.
Later on 4th October, Musk responded to another user's tweet saying that short selling should be illegal by agreeing and describing short sellers as "value destroyers".