An investigation has been opened by the U.S. Securities Regulator into TeslaThe whistleblower reported that the company did not adequately notify shareholders or the public regarding fire risk associated with defects in solar panel systems over several years. A letter from the agency stated this.

This probe puts regulatory pressure on the most valued automaker in the world. There is already a federal safety investigation into incidents involving driver assistance systems. While there have been concerns regarding Tesla solar system fires, the first investigation report from the securities regulator is not.

After Steven Henkes filed a Freedom of Information Act complaint about Tesla’s solar system in 2019, the U.S. Securities and Exchange Commission released the Tesla probe and requested information.

In a September 24 reply to Henkes’ request for records, the SEC stated that it had confirmed with Division of Enforcement staff “that the investigation from the which you seek records” and declined to give them. According to the SEC, the official stated that the response should not be taken by Henkes as an indicator of violations of law. Reuters confirmed the reply.

Henkes was a former manager of the Toyota Motor Quality Division. He was dismissed by Tesla in August 2020. He sued Tesla, alleging that the firing was in retaliation to raising safety concerns. Reuters emailed Tesla with questions but Tesla declined to answer. The SEC also refused to comment.

Henkes stated in the SEC complaint that Tesla and SolarCity (which it bought in 2016) did not disclose their “liability or exposure to damage to property, risk of injury of the users, etc. to shareholders” prior to and after the acquisition.

According to the complaint, Tesla failed to inform its customers about defective electrical connectors that could cause fires.

Tesla informed consumers it had to maintain the solar panel system in order to prevent a system failure. Henkes reported that it did not advise of potential fire hazards, provide temporary shutdowns to minimize risk or notify regulators about the problem.

His lawsuit against Tesla Energy, filed last November overwrongful termination, claims that the issue affected more than 60,000 U.S. residential customers and 500 government and business accounts.

We don’t know how many remain following Tesla’s remediation.

Henkes was a former quality manager in Toyota’s North American quality department. He moved to SolarCity in 2016 as a quality engineer, months before Tesla bought SolarCity. He told Reuters that his duties had changed after the acquisition and that he was aware of the problem.

Henkes said that he spoke with Tesla management and requested that the system be shut down. He also asked for safety regulations to be notified of the situation. He filed complaints to regulators after his repeated calls went unanswered.

The top lawyer warned that any public communication about this matter to Tesla’s reputation would be a problem. In the SEC complaint, he stated that this was “crime.”

The history of litigation and concern over Tesla’s solar system problems and faulty connectors dates back many years. Walmart in a 2019 lawsuit against Tesla said the latter’s roof solar system led to seven store fires. Both Tesla and Thelma settled the matter.

Business Insider published Tesla’s 2019 program to repair defective parts of its solar panels.

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

Henkes also made a complaint at the U.S. Consumer Product Safety Commission. CNBC reported in this year that they are investigating. Amphenol and CPSC did not respond to our request for comment.

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