SEC Investigating Tesla for Failing to Notify Investors of Fatal Crash

Steph Willems
by Steph Willems
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sec investigating tesla for failing to notify investors of fatal crash

Was the fatal May crash of a Tesla Model S driving in Autopilot mode significant enough for the automaker to inform its shareholders? The Securities and Exchange Commission plans to find out.

The federal agency recently opened an investigation into Tesla to determine if the automaker broke securities laws by not notifying investors of the crash, according to the Wall Street Journal.

To reach a conclusion, the SEC needs to decide whether the May 7 crash that killed Joshua Brown on a Florida highway was a “material” event — an incident serious enough to warrant a securities filing, which would make investors aware of potential risk.

Brown died after his vehicle’s semi-autonomous Autopilot system failed to recognize a tractor-trailer crossing the highway in front of him. The radar-and-camera setup controlling the system mistook the brightly lit trailer for the surrounding sky, meaning it didn’t alert the driver or begin emergency braking.

Tesla informed the National Highway Traffic Safety Administration of the crash on May 16, but the first time investors heard of it was a June 30 blog post on the automaker’s website. (That post coincided with media reports detailing the NHTSA’s investigation into the crash.)

By late May, Tesla investigators determined that the victim’s Autopilot system contributed to the crash, but not before the company sold $2 billion of stock.

A source familiar with the matter told the WSJ that the SEC investigation is preliminary, and might not result in any action on the part of the agency.

Even before the SEC announced its probe, some critics argued the crash counted as “material.” Tesla and the publication Fortune waged an online battle over the debate, with the magazine stating the automaker should have revealed details of the crash earlier.

[Image: Tesla Motors]

Correction: An earlier version of this story stated the Tesla Autopilot system used laser and camera technology to see objects in its vicinity. Tesla vehicles do not use laser, but use radar. We’ve corrected the article to reflect this.

Steph Willems
Steph Willems

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  • MostlyNormal MostlyNormal on Jul 12, 2016

    The Tesla system is radar and camera based, they do not have a laser sensor of any kind. The grownup automakers and Google are all developing real autonomous systems using LiDAR (a spinning laser), which would have easily 3D mapped a freaking tractor trailer.

    • NickS NickS on Jul 12, 2016

      Given this failure, the front facing detection hardware would have to be relying on visible light, i.e. cameras. I think they use radar for the sides. Radar on the front wouldn't miss a white trailer against the sun.

  • MostlyNormal MostlyNormal on Jul 12, 2016

    @NickS: I can imagine a failure mode with forward looking radar if the radar field of view is limited to hood height and below.

    • NickS NickS on Jul 12, 2016

      Well, you'd expect them to tune the sensor position and orientation (which I have to admit should not be too much to exoect). I am quite astonished actually that they are NOT combining cameras, lidar AND radar on the front to eliminate the weaknesses inherent in any ONE of these. Even lidar has some weaknesses.

  • Art_Vandelay I wish. Love the 70 series
  • Pco65752756 Why is this not on the High Mile Cars List?
  • SCE to AUX "But we can all go pound sand in North America, unfortunately"In reality, that would be about 1000 people who can go pound sand, which is why this isn't coming to North America.
  • MaintenanceCosts You could probably make this thing satisfy US emissions standards, although it wouldn't right now, but there is no way on God's green earth you could make it satisfy US safety standards.
  • MrIcky Haven't these been out for a while? Is the news just that Japan gets them now too?