The SEC Is Investigating Whistleblower Claims That Tesla Was Reckless As Its Solar Panels Go Up In Smoke

The Securities and Exchange Commission has launched an investigation into whether Tesla failed to tell investors and customers about the fire risks of its faulty solar panels.

Whistleblower and ex-employee, Steven Henkes, accused the company of flouting safety issues in a complaint with the SEC in 2019. He filed a freedom of information request to regulators and asked to see records relating to the case in September, earlier this year. An SEC official declined to hand over documents, and confirmed its probe into the company is still in progress.

“We have confirmed with Division of Enforcement staff that the investigation from which you seek records is still active and ongoing," a letter from the SEC said in a reply to Henkes’ request, according to Reuters. Active SEC complaints and investigations are typically confidential. “The SEC does not comment on the existence or nonexistence of a possible investigation,” a spokesperson from the regulatory agency told The Register.

Tesla started selling and installing solar panels after it acquired SolarCity for $2.6bn in 2016. But its goal of becoming a renewable energy company hasn’t been smooth. Several fires have erupted from Tesla’s solar panels installed on the roofs of Walmart stores, Amazon warehouses, and people’s homes.

In fact, Walmart sued the company in 2019 after seven of its supermarkets in the US caught fire. The lawsuit accused Tesla of "utter incompetence or callousness, or both." Walmart later dropped its claims, and settled the matter privately.

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Before Walmart’s lawsuit, however, Steven Henkes, who was employed as a field quality manager by Tesla after the acquisition, said he attempted to raise concerns about fire risks with managers. He claimed in a lawsuit [PDF] filed last year in November that he was wrongfully terminated after he was fired in August, last year. Henkes claimed his concerns about defects in the company’s solar panels and electrical connectors were repeatedly ignored, and after he filed initial whistleblower complaints with the SEC and the US Consumer Protection Safety Commission (CPSC).

Over 60,000 people as well as over 500 commercial consumers could have been potentially affected by fire risks from Tesla’s faulty solar panels, the lawsuit said. Tesla started replacing and reimbursing defective components in 2019, Business Insider reported. The CPSC has also been investigating the company, too. Tesla did not respond to The Register’s questions. ®