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Tesla under investigation for possible breach of securities law, WSJ reports

5 points by JackPoach 10y ago

danso 10y ago
The WSJ article from which the OP cribs is much more informative, though doesn't seem to have gotten enough upvotes in past submissions: http://www.wsj.com/articles/sec-investigating-tesla-for-possible-securities-law-breach-1468268385 http://www.wsj.com/articles/sec-investigating-tesla-for-poss... The OP doesn't crib the most relevant part, which concerns the question of why this particular fatality (out of the many attributed to any given auto manufacturer on any given week) has such a seemingly high standard: Tesla says it learned of the fatality on May 16 but didn't send an investigator to confirm that the vehicle was using Autopilot until May 18, which is why the fatality wasn't included in their May 18 filing, a filing that was published in the event of Tesla selling 2.8 million shares: > 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 the 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 said. > Tesla learned of the crash soon after it happened and informed auto-safety regulators of the incident on May 16, when it had just begun investigating the accident, the company said last week. Tesla at that time hadn’t yet determined the car was using Autopilot. Tesla said it alerted regulators to the crash sooner than rules require. > The company didn’t disclose the accident in securities filings, such as the one from May 18 when it prepared to sell $2 billion in stock, which included nearly 2.8 million shares sold by Tesla Chief Executive Elon Musk. Tesla has said Mr. Musk’s sale was triggered by tax requirements. The share sale took place May 18 and May 19. I can believe that the timing was coincidental rather than shady...but Tesla's "A Tragic Loss" press release [0] really left me uneasy. From its first graf: > We learned yesterday evening that NHTSA is opening a preliminary evaluation into the performance of Autopilot during a recent fatal crash that occurred in a Model S...Following our standard practice, Tesla informed NHTSA about the incident immediately after it occurred. "Yesterday evening" is the only specific chronological reference other than the press release's timestamp of June 30. You had to go to news reports to learn that the accident happened on May 7. Otherwise, you'd be perfectly justified in thinking that the accident happened the week preceding June 30 and that Tesla jumped to let the public know of the tragedy. One of Tesla's most devoted fans, nevermind a former member of SEAL Team 6, got killed in a horrific accident and someone in Tesla PR felt the need to throw this layer of obfuscation for the masses? I guess longtime automakers have done worse, but they don't go out of their way to brag how extra transparent they're being as they revolutionize the world. Saying that the accident happened on May 7 but the facts weren't known until later would have satisfied me, as I imagine it would have for others. What was the point of the flimsy misdirection in the press release? [0] https://www.teslamotors.com/blog/tragic-loss https://www.teslamotors.com/blog/tragic-loss

5 points by JackPoach 10y ago

danso 10y ago

The WSJ article from which the OP cribs is much more informative, though doesn't seem to have gotten enough upvotes in past submissions: http://www.wsj.com/articles/sec-investigating-tesla-for-possible-securities-law-breach-1468268385 http://www.wsj.com/articles/sec-investigating-tesla-for-poss... The OP doesn't crib the most relevant part, which concerns the question of why this particular fatality (out of the many attributed to any given auto manufacturer on any given week) has such a seemingly high standard: Tesla says it learned of the fatality on May 16 but didn't send an investigator to confirm that the vehicle was using Autopilot until May 18, which is why the fatality wasn't included in their May 18 filing, a filing that was published in the event of Tesla selling 2.8 million shares: > 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 the 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 said. > Tesla learned of the crash soon after it happened and informed auto-safety regulators of the incident on May 16, when it had just begun investigating the accident, the company said last week. Tesla at that time hadn’t yet determined the car was using Autopilot. Tesla said it alerted regulators to the crash sooner than rules require. > The company didn’t disclose the accident in securities filings, such as the one from May 18 when it prepared to sell $2 billion in stock, which included nearly 2.8 million shares sold by Tesla Chief Executive Elon Musk. Tesla has said Mr. Musk’s sale was triggered by tax requirements. The share sale took place May 18 and May 19. I can believe that the timing was coincidental rather than shady...but Tesla's "A Tragic Loss" press release [0] really left me uneasy. From its first graf: > We learned yesterday evening that NHTSA is opening a preliminary evaluation into the performance of Autopilot during a recent fatal crash that occurred in a Model S...Following our standard practice, Tesla informed NHTSA about the incident immediately after it occurred. "Yesterday evening" is the only specific chronological reference other than the press release's timestamp of June 30. You had to go to news reports to learn that the accident happened on May 7. Otherwise, you'd be perfectly justified in thinking that the accident happened the week preceding June 30 and that Tesla jumped to let the public know of the tragedy. One of Tesla's most devoted fans, nevermind a former member of SEAL Team 6, got killed in a horrific accident and someone in Tesla PR felt the need to throw this layer of obfuscation for the masses? I guess longtime automakers have done worse, but they don't go out of their way to brag how extra transparent they're being as they revolutionize the world. Saying that the accident happened on May 7 but the facts weren't known until later would have satisfied me, as I imagine it would have for others. What was the point of the flimsy misdirection in the press release? [0] https://www.teslamotors.com/blog/tragic-loss https://www.teslamotors.com/blog/tragic-loss