Tesla was probed over Model 3, report says

PALO ALTO, CALIF. — The U.S. Securities and Exchange Commission investigated Tesla over how it was selling its Model 3 sedan, but the company didn’t tell investors about it, and may still be under federal investigation, according to a new report.

The firm led by CEO Elon Musk was under investigation by the securities regulator from June 2016 to May 2017, according to SEC documents.

Tesla did not respond to a request for comment.

The electric-car maker’s process for selling the Model 3 — a $35,000 sedan aimed at the mass market — involved taking $1,000 deposits for future delivery. Hundreds of thousands of would-be Tesla owners have put up money for the Model 3.

The SEC investigation into the company ended with no enforcement action taken.

But the regulator’s refusal, on law enforcement grounds, to provide certain other records suggested that “there is at least one other unresolved SEC probe” into Tesla, according to investmentresearch firm Probes Reporter, which obtained and published the SEC records.

The research firm noted that Tesla had not told investors it was the subject of an SEC investigation.

SEC documents show the commission started investigating Tesla because it believed the company might have been “making false statements of material fact or failing to disclose material facts concerning the company’s Model 3 vehicle.”

Tesla was ordered to produce company documents related to Model 3 reservations, cancellations, and deposits, including how Tesla had used or planned to use the deposit money.

The SEC also demanded names and credit card numbers of customers who had preordered Model 3s.