The SEC Is Also Probing Tesla For Possible Fraudulent Claims About Tesla Autopilot

Nov. 03, 2022 8:51 AM ET by Gerhard Horn Government / 15 Comments

Tesla has four government institutions probing it at the moment.

As we reported last week, Tesla might face the wrath of the US Department of Justice (DoJ) in the coming years.

It's a complex situation you can explore by clicking on the hyperlink above, but in short, the DoJ has launched a probe to see whether Tesla made unsubstantiated claims about Autopilot and Full Self-Driving's abilities. A source familiar with the matter stated that Tesla could face possible criminal charges if found guilty.

This week, The Wall Street Journal published a report stating that the US Securities and Exchange Commission (SEC) is also probing Tesla for the same reason but on behalf of its various shareholders.

The SEC has been accused of letting Musk get away with making wild statements on Twitter, which led to either a drop or an increase in Tesla's stock price. That's not strictly true, however. The SEC subpoenaed Musk twice in recent years. The last subpoena was for asking Bernie Sanders whether he should sell more stock on the public platform. This one tweet led to a stock selloff on a mass scale. Nothing came of these subpoenas, making the criticism against the SEC understandable.

It might seem perfectly fine to a casual observer, but remember that Musk is in charge of the most valuable car company in the world. At the time of writing, Tesla was worth $712.99 billion. To put that in context, Toyota is the second most valuable company, and it's worth $195 billion.

Tesla stock, therefore, seems to be a safe bet for many, especially with high-profile cars like the Cybertruck and a smaller unnamed EV looming. But Musk also has the ability to send the stock price spiraling with wild announcements. He recently stated that Tesla would be worth zero without its autonomous systems, and it's unclear whether this statement set the SEC on the hunt.

The DoJ and SEC probes may be taking place simultaneously, but it appears the DoJ may push for criminal charges while the SEC will be looking at the impact of alleged unsubstantiated claims about Autopilot and Full Self-Driving on the stock price. The SEC will essentially be in charge of investigating civil consequences in the securities market.

This means there are now four government-led investigations into Tesla. The DoJ's ongoing investigation, the SEC investigation mentioned here, the ongoing investigation into Autopilot by the NHTSA, and the California DMV's case against Tesla's misleading names for its semi-autonomous systems.