Musk faces SEC probe for role in Tesla self-driving claims
Published in Business News
U.S. regulators are investigating Elon Musk’s role in shaping Tesla Inc.’s self-driving car claims, the latest effort by watchdogs to scrutinize the actions of the world’s second-richest person.
The review is part of an ongoing Securities and Exchange Commission probe of the company’s statements about its Autopilot driver-assistance system, according to a person with knowledge of the matter who asked not to be identified discussing aspects of the investigation that haven’t been disclosed.
As Tesla’s chief executive officer, the veracity of Musk’s comments carry particular heft under the agency’s rules. The SEC declined to comment. Musk and his attorney Alex Spiro didn’t respond to requests for comment.
Musk is already clashing with the SEC on several fronts. But the regulator’s Autopilot review directly touches on a business priority that Musk has singled out as crucial to Tesla’s future.
SEC officials are weighing whether Musk may have inappropriately made forward-looking statements, said the person. An investigation by the agency’s enforcement unit doesn’t always lead to consequences, but can result in lawsuits, fines or other civil penalties for companies and executives.
It couldn’t be determined specifically which of Musk’s statements or activities about Autopilot have garnered the attention of the SEC.
Tesla’s driver-assistance technology has for years been a focus of Musk. He personally directed the creation of a 2016 video that may have exaggerated the technology’s capabilities. The video’s promises of eventual fully autonomous, hands-free driving functionality have yet to materialize.
In a behind-the-scenes glimpse into Musk’s thinking about the Autopilot video, he told Tesla staff in internal emails in 2016, “I will be telling the world that this is what the car *will* be able to do.” Musk continued, “not that it can do this upon receipt.”
Tesla beats out its competitors on self-driving vehicles because “the car is upgradeable to autonomy,” Musk said during a Twitter Spaces conversation in December. “That’s something that no other car company can do,” he added.
Separately, Tesla is also facing scrutiny from safety watchdogs over its automated-driving systems and is poised for its first jury trial over a driver fatality blamed on Autopilot. The U.S. Justice Department has also been looking into whether the electric-car maker’s public comments about the feature have been misleading.
The U.S. National Highway Traffic Safety Administration has two active investigations into whether Autopilot is defective. The agency upgraded the first — focused on how Tesla Autopilot handles crash scenes with first-responder vehicles — in June of last year. It initiated the other probe — pertaining to sudden braking — four months earlier.
The Tesla CEO has been for years fighting the SEC over fallout from his infamous tweet that he had secured funding to take Tesla private.
He defended that 2018 missive this week in court in San Francisco where investors have alleged that he committed securities fraud. Musk said he believed at the time that he had financial backing from wealthy investors and the Saudi government.
Tesla stock rose 11% on Friday, extending its increase this year to 44% amid optimism the worst is over for the electric-vehicle maker. The stock fell 65% last year, partly fueled by concern that Musk would be distracted by his purchase of Twitter Inc. Musk is worth $155.7 billion, according to the Bloomberg Billionaires Index.
—With assistance from Dana Hull, Malathi Nayak, Craig Trudell, Stephanie Stoughton and Joe Schneider.
(Updates with stock prices in final paragraph.)
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