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Tesla under investigation for possible breach of securities law, WSJ reports

TechCrunch TechCrunch 11/07/2016 Lora Kolodny

Tesla is under investigation by the U.S. Securities and Exchange Commission, the Wall Street Journal reported, for a possible securities law breach.

What’s at issue is whether the electric vehicle company should have notified shareholders immediately following a fatal accident on May 7th that killed a Tesla Model S owner who was using Autopilot at the time of the crash.

A spokesperson for Tesla said that the car company has not yet heard from the S.E.C. regarding this matter.

As TechCrunch previously reported, multiple state and federal investigations are ongoing, and it is not yet clear if Tesla’s Autopilot features contributed to or caused the fatal accident in any way.

Laymen call Autopilot “self-driving” technology, and the company refers to this system as a “driver assistance system.” Numerous Tesla fan communities online share videos of drivers using Autopilot in a hands free mode despite the company advising them against this.

Among agencies investigating the fatal Tesla Autopilot crash are the National Transportation Safety Board, the National Highway Traffic Safety Administration as well as the Florida Highway Patrol.

A non-fatal but also serious crash that followed on July 1st in Pennsylvania has contributed to heightened scrutiny of Tesla’s technology, shareholder dealings and stock performance.

The July crash involved a 2016 Model X SUV, and a driver who was also using Autopilot features. The driver was charged with careless driving by Pennsylvania State Police.

In the car company’s blog, Tesla defended itself against implications by Fortune magazine that it had misled its investors about risks associated with its business and specifically, Autopilot technology.

Tesla did not disclose any information about the fatal accident to the public until June 30 with a blog post called “A Tragic Loss” even though the crash took place in early May.

It remains to be seen whether the company has violated financial or other regulations in delaying discussion of that, or any other accidents involving their cars.

To-date Tesla has not been sued for product liability. However, the family of Joshua Brown, the Tesla enthusiast killed in the Florida crash, has retained the services of a well-known personal injury law firm.

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