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Investigations launched into Tesla’s “secret project”  

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Tesla is facing two investigations over the use of company funds on a secret project, internally described as a house for CEO Elon Musk.

The probe by Manhattan federal prosecutors revolves around the expenses incurred and its purpose for "Project 42." 

In tandem, the Securities and Exchange Commission has launched a civil investigation into the same project, requesting information from Tesla.

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The US Attorney's Office leads both investigations for the Southern District of New York (SDNY) and the SEC.

They are still in their early stages and may or may not lead to formal misconduct allegations.


Tesla's internal inquiry into Project 42 was launched after employees raised concerns.

It was regarding the substantial amount of specialized glass the company had ordered for the project that has not yielded public results. 

The nature and current status of the project remain undisclosed.

Elon Musk has made major investments in Texas, including relocating to the state and moving Tesla's headquarters there.

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It’s drawn attention to his activities in the region. 

Tesla now manufactures its Model Y crossover at its Austin-area facility, scaling up production while Project 42 was in progress.

Prosecutors have also sought information about the driving range of Tesla's electric vehicles.

There have been reports of potential inflation of projected battery charge distances. 

The SEC mandates public companies disclose transactions exceeding $120,000 involving related parties, such as executives, with a significant interest. 

It also requires disclosing any perks or personal benefits worth over $10,000 provided to top executive officers.

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Furthermore, both the Justice Department and SEC have started investigations into Tesla.

It covers whether the firm misled customers and investors regarding the performance of its advanced driver-assistance system, Autopilot. 

This development adds to the ongoing conflict between Tesla, Musk, and the SEC, which began when they each settled a $20 million fraud lawsuit in 2018. 

Musk has repeatedly attempted to dismantle the settlement, claiming the SEC continues to make unnecessary information demands. 

Despite his efforts, a federal judge denied Musk's request to nullify the settlement in 2021.

In February, a San Francisco jury rejected investor claims that Musk's 2018 tweets regarding potentially taking Tesla private violated federal securities law.

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