Feds Investigate Tesla, Musk for Possible Misleading Self-Driving Claims

Tesla’s problems may not be over yet. U.S. prosecutors are investigating potentially false claims that may have defrauded investors. This includes Tesla and its CEO Elon Musk. The US Securities and Exchange Commission (SEC) is investigating whether Tesla and Musk committed securities fraud by misleading investors about their “Autopilot” and “fully autonomous driving” systems. They are determining whether these statements were intentionally false or simply ambitious.

According to a news report, officials were also investigating the possibility of wire transfer fraud to deceive investors.

This criminal investigation is separate from other investigations by the U.S. National Highway Traffic Safety Administration (NHTSA) into steering malfunctions, suspension failures, and accidents associated with Tesla’s semi-autonomous driving system.

These investigations do not indicate any wrongdoing. However, certain public statements made by Tesla and Musk could result in criminal charges or civil penalties if found guilty in court. Tesla’s lawyers argue that ambitious statements and unmet goals don’t constitute fraud, a position supported by previous court rulings.

U.S. courts have previously ruled that “showiness” and “corporate optimism” in public statements do not constitute fraud. To prove fraud, authorities would have to show that Musk and other senior executives knew the claims were false when they made them.

Nora Bass, the widow of a man who tragically died in a Tesla accident, is suing the automaker. They claim that their marketing of the Autopilot system is dangerously misleading. This incident, which occurred in Colorado in 2022, has been linked to Hans von Ohain. His Tesla, which had a partially automated driving system, left the road and collided with a tree.

According to Bass’ lawsuit, filed May 3 in state court, the Autopilot system prevented Ohan from maintaining control of his Tesla Model 3. The car caught fire after hitting a tree. Von Ohan died because of it. Fortunately, a passenger in the vehicle was able to exit the vehicle.