The SEC has opened a formal investigation into Tesla over a whistleblower complaint, a Freedom of Information Act request has shown. The investigation surrounds a complaint that Tesla failed to notify the public about fire risks associated with its solar panel system defects over several years.
The investigation was disclosed following a FOIA request from Steven Henkes, the former Tesla field quality manager who filed a whistleblower complaint about the solar systems in 2019. The SEC confirmed that an investigation is ongoing but declined to provide records, reports Reuters.
The confirmation of the investigation, the SEC says, should not be taken as an indication that any laws have been broken. Henkes, a former Toyota Motor quality division manager, though, was fired by Tesla in August 2020. He claims the dismissal was in retaliation for raising safety concerns.
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In the SEC complaint, Henkes claims Tesla and SolarCity, the company Tesla acquired in 2016 to help actualize its solar power plan, did not disclose its “liability and exposure to property damage, risk of injury of users, fire etc to shareholders” prior to and after the acquisition.
According to the complaint, Tesla also did not notify its customers that defective electrical connectors could lead to fires, instead minimizing the issue by telling them it simply needed to conduct maintenance on the panels to avoid a failure that could shut down the system.
According to Henkes’ wrongful termination lawsuit, more than 60,000 residential customers and 500 government and commercial accounts were affected by the issue. Although it is unclear how many connectors have been fixed at this point, Walmart sued Tesla in 2019 after the retailer said that the automaker’s solar panels led to seven store fires and it is not the only suit related to the solar panels.
Tesla shareholders, meanwhile, were engaged in a court battle earlier this year to determine whether or not Tesla CEO Elon Musk exercised undue influence over the company when it saved SolarCity from bankruptcy in 2016, saving his own investment in the company that was founded by his cousins.
