Tesla, the electric vehicle manufacturer owned by billionaire tech-mogul Elon Musk, faces dual U.S. Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC) probes into whether the company misled investors regarding its driver-assist technologies. The Biden DOJ and SEC are also investigating the company for potential wire fraud.
In 2018, Tesla was the target of an SEC investigation for securities fraud stemming from a social media post by Musk stating “funding secured.” The post, the SEC alleged, was intended to pump Tesla stock by insinuating Musk intended to take the electric vehicle company private despite having no actual intention of doing so. Musk agreed to step down as Tesla’s chairman as part of a settlement with the government regulator. Additionally, he and Tesla were ordered to pay $20 million in fines to cover the losses incurred by investors.
Critics of Musk and Tesla contend the electric vehicle line’s “Autopilot” feature is misleading to consumers. They point out that literature and manuals given to vehicle owners state drivers should always keep both hands on the wheel — even when “Autopilot” is engaged. In addition, they contend that videos featuring Musk engaging the driving feature while keeping his hands off the wheel are intended to add to the deception.
Federal investigators appear to have quietly begun their probe of Tesla and Musk in 2022. Early that year, Musk started to float the idea of buying Twitter while criticizing the social company’s heavy-handed censorship policies. While some of Musk’s claims regarding his electric vehicle technology may be overly optimistic, “corporate optimism” is not generally considered fraudulent in U.S. courts.
Despite Biden’s DOJ issuing subpoenas for a wide range of documents from Tesla, it remains to be seen if any actual charges will be brought.