SEC May Have Issue With Tesla's Actions After Autopilot Crash

Sources say SEC is investigating possible rules breach
By Rob Quinn,  Newser Staff
Posted Jul 12, 2016 12:30 AM CDT
Tesla Didn't Tell Investors About Autopilot Crash
A visitor looks at a Tesla Model X on display at the Beijing International Automotive Exhibition earlier this year.   (AP Photo/Mark Schiefelbein)

Tesla notified the National Highway Traffic Safety Administration after its first fatal crash involving Autopilot mode, but it didn't bother telling investors about the May 7 crash, and that could land the company in hot water. Sources tell the Wall Street Journal that the Securities and Exchange Commission is investigating whether securities laws were broken when Tesla made no mention of the crash in securities filings, including a May 18 filing just ahead of a $2 billion stock sale. The sources say the SEC is looking at whether the crash—which killed 40-year-old Joshua Brown when his Model S smashed into a truck while in Autopilot mode—counts as a "material" event that investors should have been told about.

The company says it hasn't heard from the SEC yet, and Chief Executive Elon Musk tells the Journal that at the time of the May 18 stock sale, which included 2.8 million of his own shares, he wasn't aware that had been an Autopilot accident. "What we told NHTSA was just that somebody died—it wasn't that there was an Autopilot incident," he says. A second possible Autopilot crash is now being investigated, and the Detroit Free Press reports that there may have been a third such incident in Montana early Sunday. A Montana Highway Patrol spokesman says that in the latest incident, a driver who says he had engaged Autopilot escaped injury when his car smashed into a wooden guardrail after getting off I-90 near the town of Whitehall. (Brown may have been watching a Harry Potter movie during the first Autopilot crash.)

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