The Securities and Exchange Commission is allegedly opening an investigation into Tesla Motors, according to a report from the Wall Street Journal. The investigation surrounds the potential that the electric car manufacturer failed to notify investors via a securities filing of the May 7th fatal crash of one of their products with the “Autopilot” feature enabled.
Today’s report comes just a week after it was announced that the National Highway Transportation Safety Administration (NHTSA) is also investigating Tesla’s Autopilot feature due to the May 7th incident in Florida. Tesla did notify NHTSA of the incident on May 16th, but did not issue a securities filing with the SEC.
The SEC will now have to determine if the fatal accident was “material” enough that Tesla should have provided notification to investors. The securities law is vague and some experts are of the opinion that the accident did not merit an SEC filing. This opinion is further supported by the fact Tesla’s stock quickly rebounded after news of the crash broke.
Tesla publicly announced the crash and details of its own investigation in a company blog post on June 30th. That is the same day NHTSA announced their investigation into the matter.
In previous SEC filings Tesla has provided language warning that a successful liability claim associated with its technology, including the Autopilot feature, could harm the company’s financial condition. Such language, while typical in SEC filings, suggests that perhaps the company should have disclosed the incident to investors.