Austin, Texas - Tesla is under investigation over accusations that it misused company funds to work on a secret glass house project for CEO Elon Musk, according to a bombshell report.

The project is being investigated by US prosecutors as well as the Security Exchange Commission (SEC), the markets regulator, the Wall Street Journal reported on Wednesday.

The paper had earlier reported that Tesla employees had complained to the company's board about the project, which is known as Project 42, and that an internal investigation was carried out.

The plans called for a spacious glass building to be erected near the electric vehicle company’s Austin-area headquarters.

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The investigations were in their early stages and will not necessarily result in charges being made, the report said, but authorities are looking into how much money was allocated and spent, what exactly the purpose of the building was, and to what extent Musk was involved in the project.

Any transaction over $120,000 made by a public company, where an involved party has a material interest, has to be reported to the SEC. The same applies to bonuses or perks for senior executives worth more than $10,000.

Tesla has been involved in multiple lawsuits and investigations over the years.