Tesla: One SEC investigation ends; another begins

In a Form 10-K, filed Thursday, Tesla said the SEC issued a subpoena on Dec. 4, 2019, “seeking information concerning certain financial data and contracts including Tesla’s regular financing arrangements.” Separately, the filing stated the Department of Justice has asked that Tesla “voluntarily provide it with information” about matters relating to taking Tesla private and Model 3 production rates.

The filing also stated the SEC had closed a separate investigation the agency had launched into earlier projections and other public statements Tesla had made regarding Model 3 production rates during 2017. In September 2018, the SEC sued Tesla for comments made by CEO Elon Musk on Twitter about possibly taking the publicly traded company private. The Commission, citing a lack of evidence that any such deal was a reality, sued the company in the U.S. District Court for the Southern District of New York on charges that the post misled investors.

In October 2018, U.S. District Judge Alison Nathan approved the resulting settlement. Without admitting or denying any of the SEC’s allegations, Tesla and Musk agreed to each pay a civil penalty of $20 million and agreed Musk would step down as board chairman for at least three years. Tesla said it further enhanced its disclosure controls and other corporate governance-related matters.

In April 2019, the settlement was amended to modify certain of the previously agreed disclosure procedures “to clarify the application of such procedures, which was subsequently approved by the court. All other terms of the prior settlement were reaffirmed without modification,” the Thursday filing stated. “The take-private investigation was resolved and closed with the settlement.”