The U.S. Sarbanes-Oxley Act (SOX) was passed in 2002 in response to financial scandals like Enron, a Texas company I’ve mentioned on this blog several times in terms of mounting allegations that Tesla has engaged in systemic fraud.
SOX, required for any publicly traded company and their executives, was designed to improve corporate governance, financial reporting, and accountability. While its authors focused mainly on the financial reporting and accounting irregularities such as in Enron, they also covered far more area of corporate responsibility including safety.
If any executive at Tesla, and especially their CEO, has made false statements about the safety of products or services (such that there’s a material impact on financial performance of the company) they likely violated SOX.
At this point it’s hard to argue that Elon Musk doesn’t make false statements.
- In 2018 the Tesla CEO stated its vehicles would be capable of fully autonomous driving by the end of that year. Obviously the company has not only failed to achieve that result, they have been exposed for FIVE YEARS already and in 2023 they’re accused of massive failures including inability to properly recognize stop signs.
- The Tesla CEO spread disinformation that his Autopilot system is safer than human drivers. In 2019 he stated “the probability of an accident with Autopilot is just less.” Obviously the company has failed to achieve that result (again, failing to recognize stop signs). Studies show Autopilot has been involved in hundreds of accidents, some of them fatal allegedly BECAUSE OF AUTOPILOT. Experts since at least 2016 have warned Tesla is not yet capable of “Autopilot”, and that Tesla should be held responsible for causing more crashes while fraudulently marketing its basic Level-2 ADAS as “Full Self Driving”.
- While Tesla officially says it tells drivers to keep their hands on the steering wheel, studies show such a warning is ignored completely BECAUSE OF CEO COMMENTS CONTRADICTING THEM. He has allegedly encouraged drivers to take their hands off the wheel (such as suggesting that drivers “go to sleep” while using Autopilot). Drivers would be safer if Tesla made no warning at all because the CEO’s statements would be treated with caution, instead of his suggestions being seen as reason to ignore Tesla’s warnings.
It’ll be interesting to see if SOX weighs in here on the Enron-like situation, since a lot of publicly traded companies still spend a lot of time and effort to practice some form of compliance. They’re probably wondering why Tesla doesn’t even try.
There’s a growing timeline of Tesla lies about driverless capabilities.
And we’re not even talking yet about false statements about mergers or the CEO openly stating he intentionally ignores regulations to make avoidable mistakes.
Well, I guess we might make some mistakes. Who knows? […] I want to be clear. I do not respect the SEC. I do not respect them. […] I am the largest shareholder in the company. And I can just call for a shareholder vote and get anything done that I want.
I guess it’s not a mystery how he takes a bully approach and doesn’t even try to care about safety.
Enforcement of SOX was meant to stop fraud and erosion of the market, and eventually sent Enron’s executives to court for jail sentences. Yet we haven’t seen much of those indications for this mediocre car manufacturer constantly implicated in very obvious design failures that are widely impacting public safety (let alone its own financial results).
There are even more safety failure accusations such as from Tesla whistleblower Karl Hansen, who filed a civil lawsuit in Nevada for violations of SOX.
…each allegation is indelibly disturbing. The collective picture they paint is of a culture where the bearers of bad news are banished. And with Musk himself no mere micro-manager but a proudly self-professed nano-manager, it becomes challenging to argue that the culture took form without his taking notice, providing consent, or nodding approval.
The Tesla CEO destroying his own team, silencing any and all critics in a massive cover-up to artificially promote his success?
Sounds like another case of “LiveWrong“, which may someday be reported as systemic failure to care about a big bully cheater.
Armstrong relies on his infamy to draw listeners and viewers to his content. Lance said in the documentary Lance that he believes he is still relevant. “This is gonna sound terrible. But I am relevant. I am,” the former racer said. […] Lance maintained his facade by suing journalists who suggested he cheated. He obtained a settlement from the Sunday Times after the outlet cast doubt on the legality of Armstrong’s victories. Armstrong ostracized team members who disagreed with his methods.
Oh the irony. Armstrong sounds just like the Tesla CEO with “…I am relevant. I am” after stock market gambles (Armstrong’s financial advisor was an early Uber investor) gave him money to play a journalist trying to destroy journalism.
Update: The Motley Fool says the Hyperloop hoopla announced 10 years ago by Elon Musk is another fraud.
The Boring Company has deserted numerous pitches it made to cities… Musk originally said Tesla cars would zip around the tunnel at over 100 mph on tracks. What actually exists is [one Las Vegas] tunnel where drivers ferry passengers around in Teslas at around 30 mph. The future really is now.