The NHTSA is investigating the safety of Tesla's Autopilot system after a fatal accident, and the SEC is now looking into the timeliness of Tesla's disclosure. Needless to say, Tesla's not been having a good few weeks here.
Following the revelation that the Autopilot accident that claimed the life of a prominent Tesla vlogger happened before Tesla raised $1.7 billion by selling new stock but happened weeks before, the SEC is now looking into the matter of whether or not Tesla broke any securities laws in the timeliness of their disclosure, according to the Wall Street Journal:
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 a 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 added.
A Tesla spokeswoman pointed to a blog post by the Palo Alto, Calif., company, asserting that the May 7 crash didn't require disclosure to investors. Tesla has said the fatal crash was the first in more than 130 million miles driven with Autopilot engaged since the technology made its debut in October. An SEC spokesman declined to comment.
The crash occurred on May 7th, and Tesla notified the NHTSA on the 16th right about the same time as they had begun their investigation. The accident crippled the car's cellular system, stopping Tesla from remotely pulling the vehicle logs to analyze what had gone wrong, and it wasn't unti lthe 18th of May that Tesla gained physical access to the car in Florida to download the logs. That same day Tesla opened its expanded stock offering. It wasn't until June 30th that Tesla revealed the wreck with a near-complete accounting of what happened that led to the tragic circumstances.
If there's any doubt whether or not the wreck was material to Tesla shareholders, the behavior of the stock the day of the disclosure and since should put the matter to rest: on the day of, shares of TSLA ended the next trading day up 2%, and a week later the stock is up by more than 5%. Even the late-breaking news of the SEC investigation only dented TSLA shares by 1% in after-hours trading.
Given the allegedly reckless manner in which the accident victim Joshua Brown was using Autopilot (witness accounts say he was watching a movie on a DVD player, and Tesla's logs show that he never pressed the brake pedal and was driving at 20mph over the speed limit), it's hard to find fault with Tesla's system here — they've long advised Autopilot users that they should continue to pay attention to the road and keep their hands on the steering wheel. Brown's family has hired prominent personal injury lawyer Jack Landskroner of Cleveland, and though they have not decided whether or not they are going to sue Tesla over the accident, Landskroner says that his firm has "been contacted by other drivers who have been involved in accidents while using Tesla's autopilot feature."
Separately, a Model X driver in Montana is blaming Autopilot for wrecking his car, though the circumstances are again, shall we say, suspect. It is entirely possible the driver was using Autopilot on this road, but at just two lanes without a center divider, it's not the kind of road that Tesla currently recommends for Autopilot use. Not to mention that that no matter what Autopilot does, the driver is still the ulimately responsible party in the car, not the car itself.