The Securities and Exchange Commission (SEC) is investigating whether Tesla violated securities laws by failing to report the fatal May 7 crash of a Model S electric car that occurred when the company’s Autopilot autonomous-driving system was engaged, according to The Wall Street Journal (subscription required). The information comes from an anonymous source said to have knowledge of the matter.
Tesla reported the crash, which killed 40-year-old Joshua Brown when he collided with a semi truck on a Florida road, to the National Highway Traffic Safety Administration (NHTSA). But it didn’t disclose the crash to investors in a securities filing. The SEC is investigating whether it should have disclosed the crash as a “material event,” a development that investors might consider important. A Tesla spokesperson told Digital Trends that the company has not received any communication from the SEC on this matter, and referred to a blog post stating that the crash was not material to investors.
That post was written in response to a recent Fortune article questioning whether Tesla should have disclosed the crash before a major stock offering that took place just days later. Not knowing of the purported SEC investigation, Fortune argued that Tesla sat on news of the crash until after the stock offering.
In its blog post, Tesla countered that there was no confirmation Autopilot was the cause of the crash. Even if it was, the company said, a single crash was not material to investors because it is a “statistical inevitability” that does not affect the performance metrics for Autopilot Tesla advertised to investors.
The NHTSA is investigating the May 7 crash to determine whether Autopilot was the cause. Tesla has been careful not to specifically assign blame to the driver, but has reiterated that the system is only in the beta stage, and that drivers using it need to keep their full attention on the road. This is something Tesla has said since launching Autopilot last year, but a quick scan of YouTube shows that not all drivers have heeded that warning.
Since news of the fatal crash broke, reports of other crashes involving Autopilot have surfaced. The NHTSA is investigating a second crash in which a Model X rolled over after a hitting a guardrail. A third crash, also involving a Model X, was reported on the Tesla Motors Club forum earlier this week, although the NHTSA has not commented on it. There were no major injuries reported in these two Model X crashes.
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