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Federal regulators reportedly investigating Tesla over claims of solar panel fire risks

The U.S. Securities and Exchange Commission is reportedly investigating the Austin-based company.

AUSTIN, Texas — Federal regulators are reportedly investigating Tesla after a former employee claimed the company failed to notify the public and shareholders about potential fire risk related to solar panels.

Reuters first reported Monday that the U.S. Securities and Exchange Commission (SEC) is investigating Tesla. The company didn't respond to Reuters' questions, according to the report.

According to the report, the SEC disclosed the Tesla probe in response to a Freedom of Information Act request by Steven Henkes, a former Tesla field quality manager who filed a 2019 complaint on the solar systems and asked the SEC for more information.

Reuters stated that Henkes was fired from Tesla in August 2020. He sued the company, claiming his termination was in retaliation for raising safety concerns.

Henkes alleges that Tesla didn't tell shareholders about the liability and exposure to property damage, risk of injury to users and fire and that it failed to tell customers the defective electrical connectors could lead to fires.

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

The report states that Henkes initially worked for SolarCity, which Tesla acquired in 2016. His duties changed after the acquisition and it was at that time he noticed the widespread problem and alerted Tesla management to shut down the fire-prone systems, report it to regulators and notify consumers, according to the complaint he filed. 

In a wrongful termination lawsuit filed last year against Tesla Energy, Henkes alleged that more than 60,000 residential customers in the U.S. and 500 government and commercial accounts were affected by the issue.

Read the full Reuters report.

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