SEC investigating Tesla over claims it hid solar panel fire risks

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The US securities regulator has opened an investigation into Tesla over a whistleblower complaint that the company failed to properly notify its shareholders and the public of fire risks associated with solar panel system defects over several years, according to a letter from the agency.

The US Securities and Exchange Commission disclosed the Tesla review in response to a Freedom of Information Act request by Steven Henkes, a former Tesla field quality manager, who filed a whistleblower complaint on the solar systems in 2019 and asked the agency for information about the report.

Tesla also failed to notify its customers that defective electrical connectors could lead to fires, according to the complaint.

Tesla told consumers that it needed to conduct maintenance on the solar panel system to avoid a failure that could shut down the system. It did not warn of fire risks, offer temporary shutdown to mitigate risk, or report the problems to regulators, Henkes said.

Tesla shares fell 5.5% at $960.25 on Monday after the Reuters report.

Henkes, in the SEC complaint, said he told Tesla management that Tesla needed to shut down the fire-prone solar systems, report to safety regulators and notify consumers. When his calls were ignored, he proceeded to file complaints with regulators.

Several residential customers or their insurers have sued Tesla and parts supplier Amphenol over fires related to their solar systems, according to documents provided by the legal transparency group PlainSite.

Henkes also filed a complaint with he US Consumer Product Safety Commission, which CNBC reported this year was investigating the case. CPSC and Amphenol did not respond to request for comment.