Report: SEC is investigating Tesla for possible violation of securities law

[FrodosPet]

Source: Business Insider

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.

~ snip ~

Tesla knew of the death, which occurred on May 7, before it raised $2 billion in a stock sale on May 18.

~ snip ~



Read more: http://www.businessinsider.com/sec-investigating-tesla-possible-violation-securities-law-2016-7

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I know it is almost a crime here to criticize Tesla and Elon Musk. But he needs to come back to Earth before his arrogance destroys a good thing.

[truthisfreedom]

1. Oops.

That was a big naughtie.

[VMA131Marine]

2. It's deja vu all over again...

It was an SEC investigation that destroyed the Tucker Automobile company. In the end the charges were all dropped but the company died. Who could possibly benefit if Tesla went under.......?

[elleng]

4. GEE, I WONDER!

[NWCorona]

5. While not same circumstances. The Rickenbacker shared a similar fate.

[bananas]

11. And SpaceX could die if Musk is busy with a Tesla lawsuit. nt

[Dawson Leery]

13. Not a chance in hell I am buying another GM product.

[Firebrand Gary]

3. Screw Business Insider!

We've watched every major business entity connected to Wall St attack Tesla in every facet possible! "Tesla has not received any communication from the SEC regarding this issue," a company representative told Business Insider on Monday." - directly from the OP above.

Also, your last line is extremely disappointing. I get a laugh out of people criticizing other's who are attempting to change the system, inevitably when you ask the person criticizing what they are doing... crickets

[FrodosPet]

6. Not sure what you are saying?

Tesla did NOT have any obligation to report this death in SEC filings?

I support the concept of Tesla. But they still have to be truthful in public filings.

And Elon needs to slow down bragging on autonomous vehicle technology. It is NOT easy to design and build a car that can not only see everything around it, but can put the whole picture into context.

http://fortune.com/2016/07/11/elon-musk-tesla-self-driving-cars/

What Elon Musk Misses About Self-Driving Cars

by Erin Griffith @eringriffith JULY 11, 2016, 7:18 PM EDT

But in my reporting, I also learned the road to our self-driving future will not be smooth. That fact was on full display earlier this month, after Tesla and the NHTSA announced the company’s first autonomous driving fatality, which happened in May. Joshua Brown died when his Tesla Model S drove itself into the trailer of a semi truck that was crossing a Florida highway. The car’s sensors were not able to detect the semi truck, and it crashed into the bottom of the trailer.

The news set off a wave of headlines, many raising concerns about the safety of self-driving vehicles. In a blog post, Tesla argued that the accident was a “statistical inevitability.” That’s true, given Tesla drivers have used the feature for more than 130 million miles with no other known fatalities. Regular cars yield a fatality every 100 million miles. Tesla CEO Elon Musk become combative on Twitter, calling a Fortune story about the news “BS” and sharing Tweets from others like “1.3 million people die a year in car accidents. Yet, 1 person dies in a Tesla on autopilot and people decry driverless cars as unsafe.” Over email, he told a Fortune writer to “do the bloody math.” The Guardian called his behavior “a case study on how not to handle a crisis.” Musk had a similarly scathing response to a negative New York Times review of the Model S in 2013.

Much of Musk’s beef with Fortune concerns a separate controversy over whether Tesla should have reported the crash to shareholders sooner, an issue the Securities and Exchange Commission is now reportedly investigating. But there’s a bigger, emotional issue at stake here. What Musk, Tesla, and many Silicon Valley companies do not seem to understand is that people are not callous, rational cyborgs. In the face of tragic death from a new, scary technology, we do not want cold statistics. We want to understand how it happened, and why, and whether it will happen again.

~ snip ~

It is rare to see a prominent, respected CEO of a publicly traded company (two, actually) react with defensiveness the way Musk does. But I see this thinking among startup founders and employees at large tech companies all the time. It’s the attitude of, “Why don’t people just trust that we are doing the right thing? If everyone just let us work without needing to pick apart every messy detail, we will all be better off in the end.” Expressing concern and asking hard questions, even in situations where the public is scared and wants to know more, makes you a “hater.”

~ snip ~

[Matthew28]

7. How many tens of thousands per year die from normal cars?

Maybe they all should be investigated.

[Red Mountain]

8. Shhhh......

Might lead to recalls.

Bad for business, you know.

[FrodosPet]

9. In that case, we don't need to look at driverless car safety?

Driverless car tech is coming. It is NOT here yet.

It NEEDS to prove itself on test tracks and a variety of obscure places and situations.

Unless you have a plan on replacing every human controlled vehicle literally overnight, there will still be human drivers for decades. So autonomous autos are going to have to learn to cope with them, and to drive more like a human until the human powered cars exit the roads over the next 30 to 40 years.

[Xithras]

12. Globally, 1.3 MILLION people die in car wrecks annually. More than 20 million a year are disabled.

38,000 deaths a year in the United States alone, with more than 2.5 million "seriously injured" or permanently disabled.

We tolerate this because 1.3 million deaths a year is less than 0.02% of our total human population, and those deaths are widely distributed enough to keep people from freaking out over it. And yet, nearly everyone on the planet has known at least one person killed in a crash.

Driverless cars could kill 10,000 people a year and they would STILL be the greatest leap forward in safe transportation in human history.

[FrodosPet]

15. But only if people are willing to ride in them

Developing them is a bigger challenge than some people believe. Once they are developed, then you have to sell them in enough quantity to create an economy of scale.

Even if they were approved for sale tomorrow, it would be decades before they have the technical and political ability to replace human drivers on a large scale.

[caraher]

10. More complete information is at the Wall Street Journal story

Evidently Tesla knew of and was investigating the crash before the May 18 sale, but did not yet know autopilot was involved.

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.

<snip>

After alerting safety regulators to the crash, Tesla sent an investigator on May 18 to Florida to retrieve data from the car for the first time, the company said. Tesla completed reviewing data from the vehicle the last week of May, the company said.

It's also not a clear violation of the rules, though one might argue reasonably that Tesla should have been more transparent:

Securities experts say there is no clearly defined standard for whether the May 7 accident was “material” enough to require disclosure by the company. Adam Pritchard, a law professor at the University of Michigan and former SEC attorney, said he would be “very skeptical” a court would find the fatal crash material and Tesla’s failure to disclose it as a breach of securities laws. “The behavior of the stock price—the fact that it bounced back very promptly—most courts would say was fairly persuasive evidence that it was not material.” Also in Tesla’s favor, he said: “This is development-stage technology. There are going to be wrinkles along the way.”

Erik Gerding, a law professor at the University of Colorado in Boulder, said he believes the disclosure issue presented a “tough judgment call” for Tesla executives. “The conservative approach is just to disclose it,” he said, adding that the information could be material if it engenders skepticism about Tesla cars.

[mahatmakanejeeves]

14. Another Tesla veers off road, crashes into guardrail in Montana

Another Tesla veers off road, crashes into guardrail in Montana

Greg Gardner, Detroit Free Press 5:23 p.m. EDT July 11, 2016

Another Tesla Model X driver and his passenger escaped injury in a one-vehicle accident near the small town of Whitehall, Mont., early Sunday morning, according to the state trooper who responded to the incident.
....

Regarding the Montana accident, Trooper Jade Schope of the Montana Highway Patrol declined to identify either the driver or passenger, but he did say the driver said he activated the car's Autopilot driver assist system at the beginning of the trip. ... "That's what he stated. I have no way of verifying whether it was or wasn't," Schope said. "He also stated that he was driving from Seattle to West Yellowstone, Mont."

The accident occurred after midnight Sunday morning after the driver had gotten off I-90 near Whitehall, Schope said. ... There was a sharp drop-off from the two-lane Highway 55 when the driver told Schope the car began veering to the right where it hit a wooden guardrail. The driver was able to stop the vehicle before it left the road completely. ... "He lost the right front wheel and there was extensive damage to the front of the vehicle," Schope said.

This is the third case reported in the last two weeks involving a Tesla vehicle involved in a one-vehicle accident that may or may not have involved the Autopilot semi-autonomous feature.