SEC Investigating Tesla for Possible Securities-Law Breach
July 11 2016 - 5:10PM
Dow Jones News
The Securities and Exchange Commission is investigating whether
Tesla Motors Inc. breached securities laws by failing to disclose a
fatal crash in May involving an electric car that was driving
itself, a person familiar with the matter said, heightening
scrutiny of how the Silicon Valley company handled the
information.
The May 7 accident killed the driver, Joshua Brown, a 40-year
old Tesla owner who collided with an 18-wheel semi-truck that
pulled in front of him on a Florida highway.
Tesla alerted the National Highway Traffic Safety
Administration, the U.S. car-safety regulator, to the crash and
investigated to determine whether the car was using the company's
Autopilot system, which lets cars drive themselves under certain
circumstances. But Tesla didn't disclose the crash to investors in
a securities filing.
The car-safety agency opened an investigation into the Autopilot
technology. The National Transportation Safety Board also is
investigating the crash to determine whether it reveals systemic
issues tied to development of driverless cars and investigations of
accidents involving them, an agency spokesman said Monday.
The SEC is scrutinizing whether Tesla should have disclosed the
accident as a "material" event, or a development a reasonable
investor would consider important, according to a person familiar
with the matter. The SEC's inquiry is in a very early stage and may
not lead to any enforcement action by regulators, the person
familiar added.
A Tesla spokeswoman pointed to a blog post by the Palo Alto,
Calif., company, asserting that the May 7 crash didn't require
disclosure to investors. Tesla has said the fatal crash was the
first in more than 130 million miles driven with Autopilot engaged
since the technology made its debut in October. An SEC spokesman
declined to comment.
Write to Jean Eaglesham at jean.eaglesham@wsj.com, Mike Spector
at mike.spector@wsj.com and Susan Pulliam at
susan.pulliam@wsj.com
(END) Dow Jones Newswires
July 11, 2016 16:55 ET (20:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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