The Securities and Exchange Commission (SEC) is investigating Tesla to find out if the automotive company failed to notify shareholders of the fatal May crash.
The probe to figure out if Tesla breached securities laws was first reported by the Wall Street Journal Monday.
While the accident happened May 7, it was not reported to the public until late June. Joshua Brown, a 40-year-old Model X owner and Tesla enthusiast collided with a large 18-wheeler truck while his autopilot was apparently employed.
Fortune Magazine released two reports that assert Tesla CEO Elon Musk should have disclosed the crash in a more timely manner, especially before selling $2 billion of stock. Musk rebuffed the allegations and called the reports “BS.”
@alansmurray Yes, it was material to you — BS article increased your advertising revenue. Just wasn’t material to TSLA, as shown by market.
— Elon Musk (@elonmusk) July 5, 2016
Musk and Tesla not only fired back on Twitter, but also wrote a blog post to defend the “fundamentally incorrect” characterization of their SEC filing.
There are now multiple, concurrent state and federal investigations that are in progress, according to TechCrunch, including ones conducted by National Transportation Safety Board, the National Highway Traffic Safety Administration, the Florida Highway Patrol, and now the SEC.
This federal inquiry is just another predicament in the litany of issues the electric car company is dealing with. The company also fell short of its quarterly manufacturing mark by more than 3,000 vehicles.
Tesla has never been sued for product liability, but following the crash in May, Brown’s family hired counsel from a personal injury law firm, according to Fortune.
The Guardian reported that the truck driver Brown crashed into contends that the Tesla operator was driving very fast and was “playing Harry Potter on the TV screen.”
Another crash that transpired July 1 was initially reported as an accident most likely caused by driverless technology, but was later deemed careless driving by the Pennsylvania State Police Monday. The driver was issued a citation, but it is not yet confirmed if the driver assistance system was in use.
In an interview with WSJ, Musk explained that he “didn’t know there had been an Autopilot incident at the time of the fundraising.” That is one of the main reasons why he believes all of this newfound criticism is unfounded and unfair.
@alansmurray If you care about auto deaths as material to stock prices, why no articles about 1M+/year deaths from other auto companies?
— Elon Musk (@elonmusk) July 5, 2016
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