SEC Investigating Tesla Autopilot Crash for Possible Violations of Securities Laws

2016 Tesla Model S (Credit: Tesla Motors)

The Model S that crashed and killed the driver has rocked Tesla and new reports of Autopilot-based accidents are starting to pop up left and right. When the crash initially happened, Tesla quickly alerted the NHTSA but failed to disclose the details to its investors, and Elon Musk backed up the non-disclosure by saying the crash was “not material” and, therefore, didn’t need to be disclosed. Now, a new report claims that the Securities and Exchange Commission doesn’t necessarily agree with the automaker.

The report from The Wall Street Journal claims that the SEC has launched a probe into the crash and Tesla’s non-disclosure to investors. The goal of the investigation is to learn more about the crash and Tesla’s handling of it, then determine whether it was material or not. If the SEC finds that the crash was material and needed to be disclosed to investors, then Tesla could find itself in a world of financial hurt.

A particular sticking point for the SEC is the fact that the crash occurred on May 7th and Tesla launched a $2 billion stock sale on May 18th, making everything seem a little fishy. According to Elon Musk, he “didn’t know there had been an Autopilot incident at the time of the fundraising.” He also claims that when Tesla told the NHTSA about the fatality, he didn’t know that Autopilot was involved.

Investigations and eyewitness reports claim that there is a possibility the driver was using Autopilot incorrectly—as a full-autonomous system—while he watched a movie on a portable DVD player. Though Tesla touts its Autopilot system as one of the most advanced semi-autonomous-driving systems available, it still stresses that it is not a fail-proof system that can operate without driver interaction.

At this point, the investigation is in the very early stages and the SEC has yet to file any reports on its findings. Additionally, a Tesla spokesperson told WSJ that the company has yet to receive any communication from the regulatory body.

We’ll continue monitoring this developing situation and bring you any updates as they become available