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Report: SEC Probing Tesla for Possible Breach in Securities Rules
Tesla Motors Inc. may have violated U.S. securities laws by failing to tell investors that one of its cars was involved in a fatal crash while driving in autonomous mode, a source tells The Wall Street Journal.
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Tesla Motors Inc. may have violated U.S. securities laws by failing to tell investors that one of its cars was involved in a fatal crash while driving in autonomous mode, a source tells The Wall Street Journal.
The source says the Securities and Exchange Commission has launched a preliminary investigation to determine whether Tesla should have divulged the crash ahead of a plan to sell $2 billion in stock in May.
The fatality occurred on May 7 in Florida. Tesla promptly reported the crash to the National Highway Traffic Safety Administration. But it didn’t include the incident in a securities filing on May 18 about the stock sale.
Tesla says it did alert the SEC, but not until a few days after the stock sale when it was able to determine that the company’s so-called Autopilot self-driving feature was engaged at the time of the crash. Tesla publicly revealed the crash on June 30.
Securities experts tell the Journal there is no clearly defined standard to determine whether the May 7 crash was significant enough to warrant disclosure.
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