Tesla Faces FBI Probe Into Misleading Investors About Model 3

Tesla Inc. (TSLA) faces a criminal investigation into whether the company misstated information about the production of its Model 3 sedans and misled investors about the company’s business going back to early 2017, the Wall Street Journal reported, citing people familiar with the matter.

The inquiry is being conducted by Federal Bureau of Investigation agents headed by the U.S. attorney’s office in San Francisco, the Journal reported. The criminal probe has intensified in recent weeks after the Securities and Exchange Commission settled separate civil charges with Tesla and Chief Executive Officer Elon Musk, the Journal reported the people as saying. 

Tesla said on Sept. 18 that it had received a “voluntary request” for documents from the Justice Department, less than two weeks before the company and Musk struck a settlement with the SEC of civil charges in a separate case involving controversial tweets from Musk.

The Journal cited a statement from Tesla that it had “received a voluntary request for documents from the Department of Justice about its public guidance for the Model 3 ramp” earlier this year and was “cooperative in responding to it.”

The Justice Department and the SEC declined to comment in the Journal’s story.

The SEC isn’t involved in the investigation into production issues at Tesla, the Journal reported people familiar with the matter said.

The SEC settlement related to a statement by Musk through his Twitter account on Aug. 7 that he had “funding secured” to take Tesla private. The SEC alleged that the tweet by Musk was “false and misleading.”

Under the settlement, Musk and the company agreed to pay a total of $40 million in fines and to remove Musk from his role as chairman of the board, without admitting or denying wrongdoing.

Tesla shares rose 5.1% to $330.90 on Friday.

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