Tesla says Justice Department is expanding investigations and issuing subpoenas for information

Elon Musk-owned Tesla on Monday disclosed that the Federal prosecutors have expanded investigations into Tesla beyond the electric vehicle maker's partially automated driving systems, and that they have issued subpoenas for information instead of simply requesting it.

In a quarterly report filed with the Securities and Exchange Commission, Tesla said the Department of Justice is looking into personal benefits, related parties, vehicle range and personnel decisions without giving details. According to legal experts, the additional investigation topics and the subpoenas suggest that prosecutors have broadened their inquiry, and they have found the need to force Tesla to disclose information, reported news agency Associated Press.

According to the aforementioned experts, the company filing indicates prosecutors may be investigating Tesla CEO Elon Musk, and whether the company has been candid in describing the features of its vehicles.

Tesla, in January, disclosed that the Justice Department had requested documents related to its Autopilot and Full Self-Driving features. Both features are classified as driver-assist systems, and the company says on its website that the vehicles cannot drive themselves.

Now, the company is disclosing a probe that is a lot wider than just looking at Autopilot and FSD features, Erik Gordon, a University of Michigan business and law professor, told the Associated Press. He said that the Department of Justice often starts with a formal written request and escalates to administrative subpoenas if it thinks it isn't getting full cooperation.

Specifying additional items that prosecutors are looking at indicates that Tesla lawyers found them serious enough to change the company's public disclosures, Gordon said.

While Tesla didn't respond to media queries, the company based in Austin, Texas, said in its SEC filing that to its knowledge, no government agency has concluded that any wrongdoing happened in any ongoing investigation. 

Tesla, for the first time, said in its filing that the investigations could damage the company's brand. The company filing said that if the government decides to pursue an enforcement action, there exists the possibility of a material adverse impact on its business, results of operation, prospects, cash flows financial position, or brand.

It's unclear if Tesla merely considered subpoenas as requests for information in prior quarterly disclosures, Jacob Frenkel, a former SEC enforcement attorney and ex-federal prosecutor told AP. Now the broader inquiry including relating to the Autopilot and FSD features appears subject to subpoena, he said. 

It is not possible to tell from the filing how far along the Justice Department is in its probe or whether it will result in any criminal charges, Frenkel added.

Frenkel said that the notion of a material adverse impact on the company's brand does suggest a heightened concern as to the potential consequences that could flow from a federal civil or criminal action. Tesla's disclosures could be interpreted as suggesting an expanded continuing and even potentially more damaging investigation, he added.