Elon Musk, the visionary entrepreneur and multi-talented CEO of SpaceX, Tesla, and Twitter, captivated the audience at the prestigious Viva Technology conference in Paris on June 16, 2023.
Gonzalo Fuentes | Reuters
Tesla, the pioneering electric vehicle manufacturer, is now facing two fresh federal investigations into potential misconduct involving the use of company resources for personal gain by its CEO, Elon Musk.
The Wall Street Journal was the first to break the news on Wednesday. According to their report, the U.S. Attorney’s Office for the Southern District of New York and the Securities and Exchange Commission (SEC) have launched separate inquiries. They are particularly interested in uncovering the extent of Tesla’s financial commitment towards an undisclosed project, widely believed to be a luxurious glass house located in greater Austin, Texas, presumably intended for Musk’s personal use.
Moreover, the Manhattan federal prosecutors are conducting their own investigation into allegations of battery range misrepresentation by Tesla. In July, Reuters published a groundbreaking exposé, highlighting how Tesla’s electric cars often fail to meet the advertised range and provide drivers with inaccurate remaining range information via their touchscreens.
Tesla and the Manhattan federal prosecutor’s office did not immediately respond to a request for comment. The SEC public affairs office told CNBC via email that the agency “does not comment on the existence or nonexistence of a possible investigation.”
It must be emphasized that these investigations do not automatically indicate wrongdoing. Nevertheless, they contribute to the growing list of ongoing inquiries from state and federal regulators surrounding Tesla’s operations.
In its most recent quarterly earnings report, Tesla disclosed that it routinely receives requests for information from regulatory bodies, including bodies such as the National Highway Traffic Safety Administration, the National Transportation Safety Board, the SEC, the Department of Justice, and various state, federal, and international agencies. Tesla asserts its cooperation with these requests, which include subpoenas, formal and informal inquiries, and other examinations.
Back in September 2018, the SEC charged Elon Musk and Tesla with civil securities fraud in connection with the CEO’s tweets about potentially taking Tesla private at $420 per share, stating that funding was secured. As part of the settlement agreement with the SEC, Musk agreed to step down from his role as Tesla’s chairman for three years and to have his tweets scrutinized by a securities lawyer before dissemination, should they contain material business information.
Following the revised settlement, the SEC issued subpoenas to Tesla, aiming to explore its governance processes and compliance with the terms of the agreement.
Additionally, Tesla revealed in its second-quarter financial filing for 2023 that the Department of Justice (DOJ) has requested documents related to Tesla’s Autopilot and FSD features.
The National Highway Traffic Safety Administration is also nearing a conclusion in its investigation into potential safety defects in Tesla’s Autopilot, Enhanced Autopilot, Full Self-Driving, and FSD Beta systems. The investigation commenced after several reported incidents involving Tesla vehicles equipped with Autopilot crashing into stationary emergency response vehicles.
For the full story, please refer to The Wall Street Journal’s article here.
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