You may not like it, but this is how the SEC (and government) works. I've represented issuers that have had SEC investigations hanging over them for YEARS. If you think that a week or two is too long for the SEC to wait before moving forward, or making public disclosure of what they are looking at, then you have a different experience in dealing with the SEC than I have.
I am no special pleader for the SEC. I think that like many government agencies, they are not worth the money and time they take up. They tend to be politicized and, for lack of a better word, arbitrary. If they exit to protect investors and ensure fair financial markets, they do a very poor job. I would be happy to see them prevented from going on fishing expeditions and witch hunts (they do it all the time).
With all that said, they exist, they're not going away, they're only getting more powerful and this is how they work. And Elon Musk should know better than to taunt them, as that only makes things worse. And as much as many people want to impose their own definitions of materiality on this situation, or confuse damages with materiality, the law is pretty clear on the definition of materiality and the fact that the incident may lead to a curtailment of the functionality of AP or even new government regulations on AP like activities is pretty clear evidence of materiality. Not damages, not certainty, not facts, just materiality.
I will go out on a limb here and predict that the next time Tesla has a filing that includes a Risk Factors section, there will be revised disclosure that focuses more on the risks of AP and regulation of AP.
There's nothing more I can say, as a securities law practitioner, on what has happened, so this will be my last post on the topic.
