- Tesla shares fell by more than 6% on Monday following a Reuters report about an SEC investigation into the company.
- The SEC is looking into a whistleblower’s complaint that Tesla and SolarCity didn’t publicly disclose risks associated with solar panels.
- Tesla acquired SolarCity in 2016.
Tesla stock dropped to a six-week low Monday after Reuters reported the Securities and Exchange Commission is investigating a whistleblower’s complaint that the company failed to properly notify shareholders and the public about fire risks associated with solar panel system defects.
Shares fell 4% and were off by as much as 6.4% when they hit an intraday low of $950.50, the lowest price since October 25. The stock price during 2021 has more than doubled.
The investigation was disclosed in a response to a Freedom of Information Act request by Steven Henkes, a former Tesla field quality manager who filed a complaint on the solar systems in 2019, according to the report published Monday.
Henkes said Tesla and SolarCity, which the company acquired in 2016, didn’t disclose its liability and exposure to property damage and injury and fire risks to shareholders prior to and after the acquisition.
“We have confirmed with Division of Enforcement staff that the investigation from which you seek records is still active and ongoing,” the SEC said in a Sept. 24 response to Henkes who had asked for information. The agency declined Henkes’ request to provide its records. Reuters independently confirmed the legitimacy of the SEC letter. An SEC official said the letter shouldn’t be taken as an indication by the agency that violations of law had occurred, the report said.
Henkes was fired from Tesla in August 2020. He sued, claiming the dismissal was in retaliation for raising safety concerns. Reuters said Tesla didn’t respond to its emailed questions.
The issue affected more than 60,000 residential customers in the US and 500 government and commercial accounts were affected by the issue, according to Henkes’ lawsuit filed in November 2020 against Tesla Energy over wrongful termination.
Tesla is already facing an investigation by the National Highway Traffic Safety Administration into Tesla Autopilot crashes.