Date
25 September 2017
Tesla is insisting the May 7 crash that killed a driver on auto-pilot did not require disclosure to investors. Photo: Reuters
Tesla is insisting the May 7 crash that killed a driver on auto-pilot did not require disclosure to investors. Photo: Reuters

SEC probing Tesla for non-disclosure of fatal crash

Tesla Motors Inc. may have broken US securities laws by failing to disclose a fatal crash in May involving one of its cars on auto-pilot.

The Wall Street Journal is reporting that the Securities and Exchange Commission is looking into the matter, heightening scrutiny of how the Silicon Valley company handled the information.

The May 7 accident killed the driver, Joshua Brown, a 40-year old Tesla owner who collided with an 18-wheel semi-truck that pulled in front of him on a Florida highway.

Tesla alerted the National Highway Traffic Safety Administration, the US car-safety regulator, to the crash and investigated to determine whether the car was using the company’s Autopilot system, which lets cars drive themselves under certain circumstances.

But Tesla did not disclose the crash to investors in a securities filing.

The car safety agency opened an investigation into the Autopilot technology.

The National Transportation Safety Board also is investigating the crash to determine whether it reveals systemic issues tied to development of driverless cars and investigations of accidents involving them, an agency spokesman said.

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 added.

A Tesla spokeswoman pointed to a blog post by the Palo Alto, Calif., company, asserting that the May 7 crash did not 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.

– Contact us at english@hkej.com

RA

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