SEC probes Tesla over whistleblower claims on solar panel defects
Comment of the Day

December 06 2021

Commentary by Eoin Treacy

SEC probes Tesla over whistleblower claims on solar panel defects

This article from Bloomberg may be of interest to subscribers. Here is a section:

Henkes, a former Toyota Motor quality division manager, was fired from Tesla in August 2020 and he sued Tesla claiming the dismissal was in retaliation for raising safety concerns. Tesla did not respond to Reuters' emailed questions, while the SEC declined to comment.

In the SEC complaint, Henkes said Tesla and SolarCity, which it acquired in 2016, did not disclose its "liability and exposure to property damage, risk of injury of users, fire etc to shareholders" prior and after the acquisition.

Tesla also failed to notify its customers that defective electrical connectors could lead to fires, according to the complaint.

Tesla told consumers that it needed to conduct maintenance on the solar panel system to avoid a failure that could shut down the system. It did not warn of fire risks, offer temporary shutdown to mitigate risk, or report the problems to regulators, Henkes said.

Tesla shares fell 5.5% at $960.25 on Monday after the Reuters report.

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.

Eoin Treacy's view

Elon Musk’s Teflon-like ability to bait officialdom, and avoid censure, has been part of his appeal for years. He has actively cultivated the persona of a bad boy as a means of personifying the “move fast and break things” culture of Silicon Valley. So far, it has worked and by attracting legions of retail investors he has a solid backing on social media to support him if the strategy goes sideways.

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