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Tesla Faces SEC Investigation Due to Whistleblower Claims About SolarCity

Former employee Cristina Balan said she was fired when she tried to warn Elon Musk about safety issues with Tesla products. That’s something Steven Henkes also claims, even if in a different situation: the quality engineer would have found safety problems with SolarCity solar panels. Reuters just revealed that the SEC is investigating Tesla for that.
Tesla Solar Roofs and the CyberWhistle that was supposed to joke about whistleblowers 24 photos
Photo: Tesla
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Henkes used to be a Toyota quality manager before joining SolarCity in 2016, months before Tesla bought the company. Tesla, Elon Musk, and some other directors are being sued for that deal.

While he worked for SolarCity, Henkes discovered that defective electrical connectors with the solar panels could lead to fires. He then warned the company and urged it to shut down the defective solar panels, report the issues to safety regulators, and notify its customers. Tesla would have ignored his appeals, which led him to go to safety regulators on his own with a whistleblower complaint in 2019. Tesla fired him in August 2020, and he sued the company for retaliation.

In his whistleblower complaint, Henkes asked SEC (U.S. Securities and Exchange Commission) for information with an FIA (Freedom of Information Act) request. The answer came only on September 24 and was revealed by Reuters only now.

According to the reply, Tesla was going through an investigation about those defects with its solar panels. Due to that, the SEC denied giving Henkes the information he required. Anyway, SEC’s response shows it is verifying the accusations Henkes made.

This is not the first time issues with the SolarCity technology have been reported. In 2019, Walmart sued Tesla for seven fires in its stores. Although Tesla denied defects with its solar panels, the two companies settled. If we are to consider what Elon Musk described as a Tesla policy of never disputing something in which Tesla did something wrong, the settlement could be viewed as an admission of guilt.

To SEC, Henkes said that Tesla did not disclose its "liability and exposure to property damage, risk of injury of users, fire, etc. to shareholders" before or after it purchased SolarCity. This information could make a difference in the lawsuit involving the solar company. We are yet to know the result of that legal dispute. It seems the joke with Cyberwhistles and whistleblowers could have waited a better time to happen.
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About the author: Gustavo Henrique Ruffo
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Motoring writer since 1998, Gustavo wants to write relevant stories about cars and their shift to a sustainable future.
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