Tesla ‘is under federal probe by DOJ and SEC’ over claims company funds were misallocated to plan opulent glass MANSION for boss Elon Musk
Federal investigators are investigating claims that Tesla company funds were improperly used for secret plans to build a glass house for CEO Elon Musk, according to a new report.
Prosecutors at the U.S. Attorney’s Office in Manhattan have sought information about the personal benefits paid to Musk, as well as how much Tesla spent on the project. Wall Street Journal That was reported on Wednesday based on people familiar with the case.
The Securities and Exchange Commission has also opened a civil investigation into the construction project and is requesting similar information from the company, one of the people said.
The plans, dubbed “Project 42” and described within the company as a mansion for Musk, include a dramatic glass-walled building near Tesla’s Austin gigafactory, the Journal previously reported.
After an order of multimillion-dollar specialty glass, Tesla board members quietly investigated whether company resources had been misused for the project, and whether Musk himself had played a role.
Federal investigators are investigating claims that Tesla company funds were improperly used for secret plans to build a glass house for CEO Elon Musk, according to a new report
According to the Journal, the DOJ and SEC investigations are in their early stages and may not lead to formal charges of wrongdoing.
An SEC spokesman told DailMail.com, “The SEC is not commenting on whether or not a possible investigation exists.”
Spokesmen for Tesla and the U.S. Attorney’s Office for the Southern District of New York did not immediately respond to requests for comment.
SEC rules require publicly traded companies to disclose any benefits or other personal benefits in excess of $10,000 paid to top executives, including the CEO.
The regulatory body recently filed a number of civil enforcement actions against publicly traded companies for failing to disclose executive benefits, including Hilton Worldwide and Stanley Black & Decker.
The SEC also requires publicly traded companies to disclose to investors any transactions in excess of $120,000 in which a related party, such as an executive officer, has a material interest.
Last year, for example, the agency accused a Maryland bank of failing to properly disclose the loans the bank had made to the CEO’s family trusts.
At Tesla, information about the alleged glass mansion has been trickling out intermittently for more than a year.
Plans for the glass building in Austin evolved over time, but some of the images reportedly appeared to show a residential area with bedrooms, bathrooms and a kitchen, the Journal reported last year.
The plans, dubbed “Project 42” and described within the company as a mansion for Musk, involved a dramatic glass-walled building near Tesla’s mammoth factory in Austin, seen above.
One view depicted the building as a glass cube, similar to the Apple Store on Manhattan’s Fifth Avenue (seen above), while another showed the building as a “rotated hexagon.”
One view depicted the building as a glass cube, similar to the Apple Store on Manhattan’s Fifth Avenue, while another showed the building as a “rotated hexagon” next to a body of water with the Tesla factory in the background, the report said. .
Other renderings depicted a waterfall as part of the landscape, and some Tesla employees speculated that the project could include some kind of museum.
The building in question has not yet been built, and Telsa insiders said they were unsure about the status of the project or the outcome of the board’s investigation.
The mystery project appears to date back at least a year, when Bloomberg reported that Tesla’s board was investigating a major purchase of expensive, specialized glass.
The internal investigation began after the glass purchase order was passed to Tesla’s financial and internal audit groups, Bloomberg said.
A global supply chain crisis had made the glass difficult to obtain, but the company’s “global manufacturing powerhouse” status made it easier to obtain in-demand building materials.
The board’s investigation reportedly focused on whether Tesla executives in Musk’s inner circle had used the company’s clout to obtain the glass for a project that was ultimately for his personal use.
Story in development, more to follow.