SEC investigating Tesla over whistleblower solar panel claims | Automotive Industry News

According to a letter from the agency, the US Securities and Exchange Commission has launched an investigation into Tesla Inc over a whistleblower complaint that the company had failed to properly inform its shareholders and the public about the fire risks associated with defects in solar panels for several years.

The investigation has put regulatory pressure on the world’s most valuable automaker, which is already facing a federal safety investigation into accidents involving its driver assistance systems. Concerns about Tesla solar system fires have been disclosed earlier, but this is the first report of a securities commission investigation.

The U.S. Securities and Exchange Commission opened the Tesla investigation in response to a Freedom of Information Act request from Steven Henkes, a former Tesla field quality manager, who filed a whistleblower complaint about the solar systems in 2019 and asked the agency for information on the Report asked to be published.

“We have confirmed to the employees of the Division of Enforcement that the investigation from which you are requesting documents is still active and ongoing,” the SEC said in a response to Henkes on September 24, denying his request for the documents to be made available . The SEC official said the letter should not be interpreted as an indication of any legal violations by the agency. The Reuters news agency independently confirmed that the SEC’s letter was legitimate.

Henkes, a former quality manager at Toyota Motor, was fired from Tesla in August 2020 and sued Tesla, alleging the firing was in retaliation for safety concerns. Tesla didn’t respond to Reuters’ emailed questions, while the SEC declined to comment.

In the SEC complaint, Henkes said that Tesla and SolarCity, which were acquired in 2016, did not disclose their “liability and exposure to property damage, risk of injury to users, fire, etc. to shareholders” before and after the acquisition.

Tesla also did not inform its customers that defective electrical connections could lead to fires, according to the complaint.

Tesla told consumers that the solar panel system needed servicing to avoid a failure that could shut down the system. It had neither warned of fire risks, nor offered a temporary shutdown to reduce the risk, nor reported the problems to the regulatory authorities, said Henkes.

Tesla shares fell 5.5 percent to $ 960.25 on Monday, according to the Reuters report.

Whistleblower

More than 60,000 US private customers and 500 government and commercial accounts were affected, as evidenced by its wrongful termination lawsuit filed last November against Tesla Energy.

It’s not clear how many of these are left after Tesla’s redevelopment program.

Henkes, a longtime manager of Toyota’s North American quality division, joined SolarCity as a quality engineer in 2016, months before Tesla acquired SolarCity. After the acquisition, his roles changed and he became aware of the widespread problem, he told Reuters.

Henkes said in the SEC complaint that he had told Tesla management that Tesla must shut down fire-prone solar systems, report to security officials and notify consumers. When his calls were ignored, he filed complaints with regulators.

“The top attorney warned any public communication on the subject as damaging Tesla’s reputation. For me this is criminal, ”he said in the SEC complaint.

Litigation and concerns about faulty connectors and Tesla solar system issues go back several years. Walmart said in a 2019 lawsuit against Tesla that the latter’s rooftop solar system resulted in seven store fires. Tesla denied the allegations and the two came to an agreement.

Business Insider reported on Tesla’s program to replace defective solar panel parts in 2019.

Several private customers or their insurers have sued Tesla and parts supplier Amphenol over fires related to their solar systems, according to documents from the legal transparency group PlainSite.

Henkes also filed a complaint with the U.S. Consumer Product Safety Commission, which CNBC reported was investigating the case earlier this year. The CPSC and Amphenol did not respond to the request for comment.

https://www.aljazeera.com/economy/2021/12/6/sec-investigating-tesla-over-whistleblower-solar-panel-claims