Elon Musk really can’t catch a break. Weeks after a takeover of Solar City that investors didn’t approve of and a NHTSA probe into the highly public Autopilot crash, the Securities and Exchange Commission is reportedly looking into whether Tesla breached securities law.
The Wall Street Journal reports that Tesla’s failure to disclose news of the accident to shareholders before a stock sale has raised questions at the SEC.
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Tesla reported the fatal May 7th accident to the NHTSA after the crash, but didn’t disclose any details of the crash — which went on to make international headlines — to stockholders until after a stock sale.
Following a Fortune report into whether this was legal behaviour, Tesla said that the crash was not “material information” for shareholders. Tesla’s secondary stock offering included several million dollars of shares belonging to Elon Musk, so he stood to lose personally if news of the crash had affected the stock offering.
Tesla told The Verge that it has not received any communication from the SEC over the matter, which agrees with what the WSJ‘s sources say, that the investigation is in the early stages and may well not result in anything.
Regardless of the end result, it’s just another bad piece of PR for Tesla. Although this should be the company’s time to shine, with hundreds of thousands of pre-orders and its cars getting widespread appeal, success is being overshadowed by negative stories.
