What happened

Shares of TuSimple Holdings (TSP) skidded off the road Monday, crashing as much as 47.5%. As of 12:47 p.m. ET, the stock was still down 46.4%.

The catalyst that sent the self-driving truck start-up tumbling was a report that federal regulators have launched an investigation into whether executives improperly shared proprietary technology with a start-up based in China.

So what

A number of federal agencies, including the Federal Bureau of Investigation (FBI), Securities and Exchange Commission (SEC), and the Committee on Foreign Investment in the U.S. (Cfius) are investigating a relationship between CEO Xiaodi Hou and Hydron, a Chinese start-up focused on self-driving, hydrogen-powered trucks -- a company launched last year by Mo Chen, one of TuSimple's co-founders. Specifically, TuSimple may have shared protected technology without notifying regulators and shareholders. 

After conducting its own investigation, which has been ongoing since July, TuSimple's board of directors took the drastic step of terminating the CEO and removing him from the board. "These actions have been taken in connection with an ongoing investigation led by the Audit Committee of the Board that led the Board to conclude that a change of chief executive officer was necessary," the company said in a press release. 

Now what

This is just the latest in a series of events that have plagued the company. Earlier this year, a vehicle using TuSimple's self-driving system veered across multiple lanes of traffic while traveling at 65 miles per hour and slammed into a concrete divider in Tucson, Arizona. Executives initially blamed the crash on human error, but reports suggest the company's autonomous driving system may have been at fault.

TuSimple is widely regarded as the leader in self-driving big rigs, drawing an investment from United Parcel Service and striking a partnership with DHL. Unfortunately, ongoing questions about its technology and questionable business practices are red flags that shouldn't be ignored. Therefore, investors should steer far clear of TuSimple.