The U.S. securities regulator has opened an investigation into Tesla Inc over a whistleblower complaint that the company failed to properly notify its shareholders and the public of fire risks associated with solar panel system defects over several years, according to a letter from the agency.
The probe raises regulatory pressure on the world’s most valuable automaker, which already faces a federal safety probe into accidents involving its driver assistant systems.
The U.S. Securities and Exchange Commission disclosed the Tesla probe in response to a Freedom of Information Act request by Steven Henkes, a former Tesla field quality manager, who filed a whistleblower complaint on the solar systems in 2019 and asked the agency for information about the report.
“We have confirmed with Division of Enforcement staff that the investigation from which you seek records is still active and ongoing,” the SEC said in a Sept. 24 response to Henkes, declining his request to provide its records.
The SEC official said the letter should not be taken as an indication by the agency that violations of law had occurred.
More than 60,000 residential customers in the U.S. and 500 government and commercial accounts were affected by the issue, according to his lawsuit filed in November last year against Tesla Energy over wrongful termination.
It is not clear how many of those remain after Tesla’s remediation program.
Henkes, a longtime manager at 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.
Henkes, in the SEC complaint, said he told Tesla management that Tesla needs to shut down the fire-prone solar systems, report to safety regulators and notify consumers. When his calls were ignored, he proceeded to file complaints with regulators.
Tesla’s Stock seems to be immune to the news: