Tesla Motors Inc (TSLA) Slides on Report of SEC Investigation

Tesla Motors Inc (NASDAQ:TSLA) is in the crosshairs in Monday’s after-hours trading, with TSLA stock off 2% amid a Wall Street Journal report saying that the U.S. Securities and Exchange Commission is investigating Tesla over its timing in disclosing a May 7 crash.

Tesla model 3 tsla

Source: Tesla Motors

Tesla itself said last week that it waited nine days before telling regulators that one of its vehicles was engaged in the partial self-driving mode.

The potential issue? The company executed an offering of TSLA stock on May 18 and 19 that raised at least $1.46 billion. While Tesla had informed the government of the crash and its investigation into Autopilot’s potential involvement on May 16, the company still was investigating the incident by the stock offering dates.

The National Highway Traffic Safety Administration also had not yet informed Tesla that a probe had been opened; that announcement came June 30.

CEO Elon Musk tweeted last week that the news “wasn’t material” to TSLA. However, per the WSJ report:

“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 familiar added.”

Tesla also has said that the circumstances of the crash were “extremely rare.” According to TSLA, “The high ride height of the trailer combined with its positioning across the road and the extremely rare circumstances of the impact caused the Model S to pass under the trailer, with the bottom of the trailer impacting the windshield of the Model S.”

Joshua D. Brown, who was killed in the Tesla crash, had previously posted videos touting the abilities of the Autopilot feature.

As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/07/tesla-motors-inc-tsla-slides-report-sec-investigation/.

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