The US Securities and Exchange Commission is investigating Tesla for a possible securities-law violation, according to the Wall Street Journal.
The inquiry — at its early stages — is in connection to Tesla’s failure to disclose a fatal crash involving one of the company’s Autopilot-equipped cars to investors, the newspaper said, citing a person familiar with the matter.
“Tesla has not received any communication from the SEC regarding this issue,” a company representative told Business Insider on Monday.
The company has been criticized for not telling investors of the death of a Tesla Model S driver.
Tesla knew of the death, which occurred on May 7, before it raised $2 billion in a stock sale on May 18.
News of the fatal crash became public only at the end of June after the National Highway Traffic Safety Administration’s Office of Defects Investigation indicated that it is looking into the performance of Tesla’s automated-driving system that was in use at the time of the crash.
Since last week, Tesla and CEO Elon Musk have been defending the lack of disclosure, saying that it is not “material nonpublic information.”
Under SEC rules, companies are required to disclose to shareholders any material nonpublic information it passes along to other entities. Regulation Fair Disclosure, however, is mostly targeted at information made available to some shareholders, investors, or individuals with an ability to profit off of this information before the broader markets know.
The SEC declined to comment.
In the wake of the Tesla crash, the National Transportation Safety Boardannounced last week that it is probing the incident to see if there are any systemic issues with the automated driving systems on the road today.
Shares of Tesla fell less than 2% in after-hours trading after rising 3.7% during the regular trading session. Continue reading “Report: SEC is investigating Tesla for possible violation of securities law”