The Securities and Exchange Commission is investigating whether Tesla Motors Inc. breached securities laws by failing to disclose a fatal crash in May involving an electric car that was driving itself, a person familiar with the matter said, heightening scrutiny of how the Silicon Valley company handled the information.
The May 7 accident killed the driver, Joshua Brown, a 40-year old Tesla owner who collided with an 18-wheel semi-truck that pulled in front of him on a Florida highway.
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Tesla alerted the National Highway Traffic Safety Administration, the U.S. car-safety regulator, to the crash and investigated to determine whether the car was using the company's Autopilot system, which lets cars drive themselves under certain circumstances. But Tesla didn't disclose the crash to investors in a securities filing.
The car-safety agency opened an investigation into the Autopilot technology. The National Transportation Safety Board also is investigating the crash to determine whether it reveals systemic issues tied to development of driverless cars and investigations of accidents involving them, an agency spokesman said Monday.
The SEC is scrutinizing whether Tesla should have disclosed the accident as a "material" event, or a development a reasonable investor would consider important, according to a person familiar with the matter. The SEC's inquiry is in a very early stage and may not lead to any enforcement action by regulators, the person familiar added.
A Tesla spokeswoman pointed to a blog post by the Palo Alto, Calif., company, asserting that the May 7 crash didn't require disclosure to investors. Tesla has said the fatal crash was the first in more than 130 million miles driven with Autopilot engaged since the technology made its debut in October. An SEC spokesman declined to comment.
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