Home News Tesla subpoenaed by SEC over Model 3 production forecasts

Tesla subpoenaed by SEC over Model 3 production forecasts

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Tesla said Friday in a regulatory filing that the U.S. Securities and Exchange Commission and Department of Justice are forecasting projections made annually about Model 3 production rates. The SEC has issued subpoenas for information associated with Model 3 manufacturing estimates. The DOJ, which is conducting a separate investigation over Model 3 manufacturing objectives, has stopped short of taking that action.

The info included at Tesla’s 10Q filing backs up an October 26 article from The Wall Street Journal that noted that the FBI was investigating if the company misstated info about Model 3 production and tricked investors. The FBI is the investigating arm of the DOJ.

Tesla issued an announcement at the time of the report, acknowledging that it had obtained a voluntary petition for records in the Department of Justice about its public guidance for its Model 3 ramp. “We were cooperative in responding to it,” the statement issued last week said. “We haven’t got a subpoena, a request for testimony, or some other formal process, and there have been no additional document requests about this from the Department of Justice for months. ”

Verification is provided by this latest filing and clarifies the extent of the investigations. It’s the first time Tesla has said that the SEC has issued subpoenas to the firm for information about the Model 3 production.

This ’s the whole nugget in the SEC filing:

We get requests for information from authorities and governmental authorities, such as the National Highway Traffic Safety Administration, the National Transportation Safety Board, the SEC, the Department of Justice (“DOJ”-RRB- and different state agencies. We often collaborate with this kind of regulatory and governmental requests.

Specifically, the SEC has issued subpoenas to Tesla in connection with (a) Mr. Musk’s previous statement he was considering taking Tesla private and (b) particular projections which we left for Model 3 production rates throughout 2017 along with other public statements relating to Model 3 production. The DOJ has also asked us to willingly give it information about every one of those matters and is investigating. Aside from the settlement with the SEC concerning Mr. Musk’s statement he was considering taking Tesla private, there have not been any developments in these matters we deem to be material, as well as our knowledge no government service in any continuing investigation has concluded any wrongdoing occurred. As is our usual practice, we have been working and will continue to cooperate with government police. We cannot predict the results or effect of some ongoing matters. Should the government choose to pursue an enforcement action, there exists the possibility of a material adverse effect on our business, results of performance, prospects, money flows, and financial position.

We are also subject to various other legal proceedings and claims that arise in the normal course of business activities. If an unfavorable ruling or advancement were to happen, there’s the possibility of a material adverse effect on our business, results of operations, prospects, cash flows, financial position and manufacturer.

This didn’t stop CEO Elon Musk from blasting the WSJ for the report in a extended podcast interview released Friday with Recode’s Kara Swisher.

“The quantity of untruthful stuff that is written is incredible. Take that Wall Street Journal front-page article about, like, ‘The FBI is closing in. ’ That is completely false. That’s pretty foolish. To print such a falsehood on the front page of a major paper is outrageous. Just like why are they even journalists? They’re dreadful. Terrible folks. ”

Tesla lately reached a settlement with the SEC, which began with a now infamous “funding secured” tweet by Musk about accepting the electric automaker private.  A federal judge accepted October 16 Musk’s settlement using the SEC over securities fraud allegations.  The SEC alleged in a complaint filed in September that Musk lied when he tweeted on August 7 he had “financing secured” for a private takeover of the company at $420 per share.


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