Exclusive-SEC is investigating Tesla for its solar panel fault claims.

Author: Hyunjoo Jin

SAN FRANCISCO (Reuters) – US securities regulator has launched an investigation into a lawsuit against Tesla (NASDAQ 🙂 Inc. for failing to properly notify its shareholders and citizens of the fire risks associated with solar panel system failures for several years. according to a letter from the agency.

The probe is stepping up regulatory pressure on the world’s most valuable carmaker, which is already facing a federal security probe-related driver-assistance system crash. Concerns about Tesla solar system fires have been published before, but this is the first report to investigate regulatory values.

The U.S. Securities and Exchange Commission launched the Tesla spacecraft Steven Henkes, a former Tesla field quality manager, in response to a request for the Freedom of Information Act, filed a complaint about solar systems in 2019 and asked the agency for information on the report. .

“We have confirmed with the staff of the Enforcement Division that there is an active and ongoing investigation into the search for records,” the SEC said in a Sept. 24 response to Henkes, refusing to request its records. An SEC official said the letter should not be taken as an indication that the agency had violated the law. Reuters independently confirmed that the SEC’s letter was legitimate.

Henkes, ex Toyota The director of the Motor (NYSE 🙂 quality division was fired from Tesla in August 2020 and sued Tesla, saying the dismissal was a revenge for raising safety concerns. Tesla did not respond to questions sent to Reuters by e-mail, and the SEC declined to comment.

In the SEC’s complaint, Henkes said that in 2016, Tesla and SolarCity did not disclose their “liability and exposure to property damage, risk of injury to users, fire, etc.” to shareholders before and after the purchase.

Tesla also did not inform its customers that faulty electrical connectors could cause fires, according to the complaint.

Tesla told consumers it needed to do maintenance on the solar panel system to avoid a failure that could shut down the system. Henkes said he did not warn of the dangers of the fire, nor did he offer a temporary shutdown to mitigate the risk, nor did he report the problems to regulators.

Shares of Tesla were down 5.5% on Monday at $ 960.25, according to a Reuters report.

TOYOTA FORMER QUALITY MANAGEMENT WHISTLE WHISTLE

The problem has affected more than 60,000 U.S. residential customers and 500 government and commercial accounts, according to a lawsuit filed in November last year for unfair termination of Tesla Energy.

It is unclear how many of these remain after Tesla’s repair program.

Henkes, a longtime manager of Toyota’s North American quality division, joined SolarCity as a quality engineer in 2016, a month before Tesla bought SolarCity. After the purchase, his duties changed and he became aware of the widespread problem, he told Reuters.

Henkes, in a complaint to the SEC, told Tesla management that Tesla should shut down solar systems that are subject to fire, inform safety regulators and inform consumers. When his calls were ignored, he began filing complaints with regulators.

“The attorney above warned the public of any communication on this issue to the detriment of Tesla’s reputation. For me, this is criminal,” he said in a SEC complaint.

Issues and concerns about faulty connectors and Tesla solar system issues have been around for years. Walmart (NYSE 🙂 said in a 2019 lawsuit against Tesla that the roof’s solar system caused seven store fires. Tesla denied the allegations and both were resolved.

Business Insider reported in 2019 on Tesla’s program to replace defective defective solar panel parts.

Several residential customers or their insurers have sued Tesla and Amphenol Parts Supplier (NYSE 🙂 for solar system-related fires, according to documents provided by the legal transparency group PlainSite.

Henkes also filed a complaint with the U.S. Consumer Product Safety Commission, and CNBC reported that it was investigating the case this year. CPSC and Amphenol did not respond to the request for comment.