SAN FRANCISCO – The U.S. Securities and Exchange Commission has opened an investigation into Tesla about a whistleblower complaint that the company had failed to properly notify shareholders and the public of the fire risk associated with solar panel system failures for years, according to a letter. letter from this agency.
The investigation increases legal pressure on the world’s most valuable automaker, which is already facing a federal safety investigation into crashes involving driver-assistant systems. their. Concerns about fires from Tesla’s solar system have been publicized before, but this is the securities regulator’s first investigative report.
The U.S. Securities and Exchange Commission disclosed the Tesla investigation as required by the Freedom of Information Act by Steven Henkes, a former Tesla field quality officer who filed a complaint about the energy system. solar energy in 2019 and asked the agency for information on the report. .
“We have confirmed with Law Enforcement personnel that the investigation for which you seek records is active and ongoing,” the SEC said in a September 24 response to Henkes, denying the request. provide his profile. SEC officials said the letter should not be taken as an indication by the agency that a violation of the law occurred. Reuters independently confirmed the SEC letter was legitimate.
Henkes, a former Toyota The quality manager, was fired by Tesla in August 2020, and he sued Tesla claiming the firing was in retaliation for raising safety concerns. Tesla did not respond to Reuters emailed questions, while the SEC declined to comment.
In their complaint with the SEC, Henkes said Tesla and SolarCity, which they acquired in 2016, failed to disclose “liability and tolerance for property damage, risk of user injury, fire, fire, etc. to shareholders” before and after the acquisition.
Tesla also failed to notify its customers that faulty electrical connectors could lead to fires, according to the lawsuit.
Tesla told consumers it was important to get their solar panel system serviced in order to avoid a failure that could shut down the system. It does not warn of fire hazards, temporarily shut down operations to mitigate risk, or report problems to regulators, Henkes said.
Tesla shares fell 3.6% to $981.85 on Monday following the Reuters report.
60,000 landlords
More than 60,000 residential customers in the US and 500 government and commercial accounts have been affected by the issue, according to his lawsuit filed last November against Tesla Energy for contract termination. France.
It’s not clear how many are left after Tesla’s remediation program.
Henkes, a longtime manager at Toyota’s North American quality division, moved to SolarCity as a quality engineer in 2016, months before Tesla acquired SolarCity. After the acquisition, his mission changed and he became aware of the widespread problem, he told Reuters.
Henkes, in his complaint with the SEC, said he told Tesla management that Tesla needed to shut down its flammable solar systems, report it to safety regulators, and notify consumers. When his calls were ignored, he went on to file complaints with regulators.
“The top attorney warns any information about this matter to the public will damage Tesla’s reputation. To me, this is criminal,” he said in the SEC complaint.
Lawsuits and concerns over faulty connectors and problems with Tesla’s solar system have dragged on since several years ago. Walmart in 2019 against Tesla said its rooftop solar system later led to seven store fires. Tesla has denied the allegations and the two have settled.
Business Insider covered Tesla’s defective solar panel parts replacement program in 2019.
Some residential customers or theirs insurer sued Tesla and component supplier Amphenol over fires related to their solar power systems, according to documents provided by legal transparency group PlainSite.
Henkes has also filed a complaint with the US Consumer Product Safety Commission, which CNBC reported this year is investigating the incident. CPSC and Amphenol did not respond to requests for comment.
