Report: SEC Probing Tesla for Failing to Disclose Crash to Investors
Tesla faces more controversy
According to recent reports, the Securities and Exchange Commission is now investigating whether Tesla violated securities laws after the fatal Model S crash in May. The agency is trying to determine whether Tesla should have disclosed the crash to investors.
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The Wall Street Journal, citing an unnamed source familiar with the matter, says the SEC's investigation is in the early stages and may not lead to any action against the automaker. But it does raise questions about Tesla's handling of the fatal crash that involved its semi-autonomous Autopilot technology.
Tesla found out about the May 7 accident soon after it occurred and alerted safety regulators on May 16, the automaker has said. At that time, Tesla hadn't concluded the Model S was in Autopilot mode. Despite telling safety regulators about the crash, Tesla didn't disclose the accident in certain securities filings, including one on May 18 in which Tesla was preparing to sell $2 billion in stock. The SEC is now determining whether the fatal crash should be considered as a "material" event, or an event that would be deemed important to investors, according to reports.
In previous securities filings, Tesla warned about the possibility of liability claims against Autopilot harming the company's financial position. In its recent quarterly report, it said that type of situation "could generate substantial negative publicity about our products and business and would have material adverse effect on our brand, business, prospects and operating results."
After informing safety regulators of the Model S crash, Tesla sent an investigator to Florida to retrieve data from the car on May 18. During the last week of May, Tesla finished reviewing data from the vehicle. On June 30, the company released a public blog post about the crash and said that Autopilot was in use at the time of the incident.
"The damage sustained by the Model S in the crash limited Tesla's ability to recover data from it remotely," a company spokesman said, reportsWSJ. "During the last week of May, Tesla was able to finish its review of the logs and complete its investigation. The financing round had already taken place by that time."
In a statement toMotor Trendon Tuesday morning, a Tesla spokeswoman said, "Tesla has not received any communication from the SEC regarding this issue. Our blog post last week provided the relevant information about this issue."
As it faces scrutiny from the SEC, Tesla is also under the magnifying glass of auto safety regulators. The National Highway Traffic Safety Administration has opened an investigation into Autopilot. Meanwhile, there are reports of two separate Model X crashes, although it's unclear whether Tesla's technology had anything to do with those incidents.
Source: The Wall Street Journal
When I tell people I write about cars, the most common reply I receive is “Really?” I guess I never strike people as a car type as I drive down the freeway in the right lane going 60 mph in my old SUV. My gripes about driving in city traffic and fast drivers don’t help my case, either. For a time, the only cars I liked were old cars. Not old as in "classic" or "vintage," but as in well-worn. My first appreciation of cars came when I drove a very old Ford pickup. It wasn't perfect: I used a booster seat to reach the gas pedal, and the turn signal once fell off in my hand as I was learning to drive. But the thing I valued most was the memories. It took several years for me to truly become a "car person." Being a long-time writer and an avid reader has helped me develop a healthy curiosity and a desire to know how things work. This has made cars one of the most fascinating points of study for me because they are such intricate machines. I am interested in how cars can reach 200 mph, how they can run on hydrogen, and how they can drive and park on their own. I also enjoy learning how cars can solve problems whether it be in the form of reducing pollution, minimizing traffic, or helping people stay connected on the road. Yes, maybe I’m not a gearhead. Perhaps I’m a car nerd. Either way, I very much enjoy writing about cars and helping people stay in tune with the automotive industry. I wouldn't want to be writing about anything else. And don’t get me wrong: I know how to drool over a hot car. I am fascinated by the Tesla Model S, awed by the Lamborghini Veneno, and am hopelessly obsessed with the Audi R8.
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