Tesla building 'glass house' for Musk, probe launched into fund misuse claims

Elon Musk's Tesla is reportedly under investigation over accusations of misuse of funds for a secret project, internally referred to as "Project 42," which was described as a 'glass house' for the billionaire CEO.

Investigating Elon Musk's glass house

As per a Wall Street Journal (WSJ) report published on Wednesday (August 31st), the investigation is led by the United States Attorney's Office for the Southern District of New York. Markets regulator the Security Exchange Commission (SEC) is also a part of this investigation.

Manhattan federal prosecutors' investigation is reportedly focusing on personal benefits provided to Musk, the expenses incurred by Tesla for the project, and its purpose.

The investigation was prompted by reports that Tesla board members had conducted an internal inquiry into whether company resources were used improperly for the undisclosed project. As per the report, Tesla employees had complained to the company's board about the project.

The SEC has also initiated a civil investigation into Project 42, seeking similar information from the company.

However, as per the report, the investigations are in their early stages and will not necessarily result in charges being made.

Project 42

Details of Project 42 emerged last year when employees were working on a spacious glass building near Tesla's Austin-area headquarters.

In July, WSJ reported that plans for Project 42 included the construction of a unique glass structure in various designs, including a twisted hexagon and an expansive glass box that appeared to house a residential area for Musk.

For this project, millions of dollars worth of specialised glass was ordered. However, as per the report, the status of the project and whether the glass worth millions was ever delivered is still unknown.

Tesla's legal troubles

This comes amid other regulatory challenges for Tesla. The Justice Department and SEC are also investigating whether the company misled customers and investors regarding the capabilities of its 'Autopilot' advanced driver-assistance system.

Over the years, Elon Musk and Tesla have faced multiple legal issues with regulatory bodies. Most notably in 2018, when the two entities settled a lawsuit with the SEC over allegations of misleading investors about taking the automakerprivate.

(With inputs from agencies)

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