SEC Sent Subpoena To Tesla In November 2021 Regarding "Twitter Sitter" Compliance

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by Tyler Durden
Monday, Feb 07, 2022 - 03:31 PM

The Securities and Exchange Commission sent a subpoena to Tesla on November 16, 2021, the company's 10-K, filed today, revealed. The subpoena was related to Tesla's governance process concerning compliance with a settlement reached with the SEC in September 2018 and amended in 2019.

The filing read:

"For example, the SEC had issued subpoenas to Tesla in connection with Elon Musk’s prior statement that he was considering taking Tesla private. The take-private investigation was resolved and closed with a settlement entered into with the SEC in September 2018 and as further clarified in April 2019 in an amendment. More recently, on November 16, 2021, the SEC issued a subpoena to us seeking information on our governance processes around compliance with the SEC settlement, as amended."

The filing also noted that Tesla had received information requests from the DOJ related to financial data and contracts:

"On December 4, 2019, the SEC issued a subpoena seeking information concerning certain financial data and contracts including Tesla’s regular financing arrangements. On December 16, 2021, the SEC informed us that it closed this investigation. Separately, the DOJ had also asked us to voluntarily provide it with information about the above matter related to taking Tesla private and Model 3 production rates. We have not received any further requests from DOJ on these matters since we last provided information in May 2019."

Regulators may also be keen to take a look at CEO Elon Musk selling billions of dollars in stock in the weeks during, and after the SEC's subpoena. Musk also Tweeted (jokingly, we presume) last December that he was "thinking of quitting" his jobs to "become a full time influencer".

While Tesla deals with these regulatory inquiries, it has also been dealing with a litany of recalls, we noted last month. We just noted that over 800,000 vehicles had been recalled over a seat belt chime malfunction.

This follows  December's massive recall of 475,000 vehicles, consisting of vehicles that could be prone to wiring harness damage and quality issues with the front truck (or, as some call it, a "frunk").

As we have noted over the years, Tesla has been plagued with countless quality control issues. Some owners have reported bumpers ripping off in adverse weather conditions, roofs flying off, and trim and paneling gaps, among many other defects.