Elon Musk in trouble, for a strong complaint against him investigated by the Biden government

Complaint against Tesla

The United States government opened an investigation into Tesla Inc over a complaint that the company failed to adequately notify its shareholders and the public of the fire risks associated with defects in solar panel systems for several years.

This is indicated by a letter from the United States Securities Commission (SEC), which began work that increases regulatory pressure on the world’s most valuable automaker, according to Reuters.

It should be remembered that the company Elon Musk is already facing a federal safety investigation into accidents involving its driver assistance systems.

Concerns about the fires sparked by Tesla’s solar systems had previously been published, but this is the first investigative report by the federal securities regulator. The SEC released the letter in response to a Freedom of Information Act request from Steven Henkes, a former Tesla field quality manager, who filed a complaint about solar systems in 2019 and asked the agency for information about The report.

“We have confirmed with the Compliance Division staff that the investigation for which it is seeking records is still active and ongoing,” the SEC said in a Sept. 24 response to Henkes, rejecting his request to provide its records.

Elon Musk in trouble
Elon Musk in trouble

The SEC official said the letter should not be taken as an indication by the agency that violations of the law had occurred. Reuters independently confirmed that the SEC’s letter was legitimate. Henkes is a former Toyota Motor quality division manager who was fired from Tesla in August 2020 and sued Tesla claiming the firing was in retaliation for raising safety concerns.

Meanwhile, Tesla did not respond to questions from Reuters, while the SEC declined to comment. In the SEC’s lawsuit, Henkes said that Tesla and SolarCity, which it acquired in 2016, did not disclose their “liability and exposure to property damage, risk of user injury, fire, etc. to shareholders ”before and after the acquisition.

According to Henkes, Tesla also failed to notify customers that faulty electrical connectors could cause fires, according to the lawsuit. Tesla told consumers that it had to perform maintenance on the solar panel system to avoid a failure that could shut down the system. However, according to Reuters, it did not warn of fire risks, offer a temporary shutdown to mitigate the risk, or report the problems to regulators, Henkes said.

In this regard, more than 60,000 residential customers in the United States and 500 government and commercial accounts were affected by the problem, according to the lawsuit filed in November last year against Tesla Energy for unfair dismissal. It is unclear how many of “they remain after Tesla’s remediation program.”

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

In the SEC complaint, he said he told Tesla management that it had to shut down fire-prone solar systems, inform safety regulators and notify consumers. “When his calls were ignored, he proceeded to file complaints with regulators.”

“The lead attorney cautioned that any communication of this matter to the public was damaging to Tesla’s reputation. For me, this is a crime, “he said in the complaint to the SEC.

Litigation and concerns over faulty connectors and Tesla’s solar system problems date back several years. Walmart, in a 2019 lawsuit against Tesla, said the latter’s rooftop solar system sparked seven store fires. Tesla denied the allegations and the two reached an agreement.

Meanwhile, Business Insider reported Tesla’s program to replace defective solar panel parts in 2019. Several residential customers or their insurers have sued Tesla and parts supplier Amphenol (APH.N) for fires related to their solar systems. , according to documents provided by the PlainSite legal transparency group. Henkes also filed a complaint with the U.S. Consumer Product Safety Commission (CPSC), which CNBC reported this year was investigating the case. The CPSC and Amphenol did not respond to Reuters’ request for comment.

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Elon Musk in trouble, for a strong complaint against him investigated by the Biden government