Online Publication Believes Tesla Is Under SEC Investigation
Tesla may be under investigation by the Securities and Exchange Commission, based upon speculation by an online publication whose modus operandi involves filing Freedom of Information Act requests.
AutoblogGreen reports an online publication called Probes Reporter filed a FOIA request with the SEC about Tesla, along with a number of corporations the publication is interested in learning more about.
Based on the responses received, the publication reads the tea leaves to determine if the SEC is investigating a given company. The request regarding Tesla was denied per a letter from the agency, citing the “law enforcement exemption” aspect of FOIA as the reason. Thus, Probes Reporter suspects Tesla is being investigated in an “undisclosed probe,” and added the company to its watch list.
As for what Tesla itself has to say, representative Liz Jarvis-Shean says her employer doesn’t comment on rumors and speculation.
I'm curious how TTAC came to the conclusion that the website that reported the investigation is a "tinfoil hat" outfit.
Comment on ABG reveals that Probes was founded by John Gavin. My question is, did TTAC bother to check the primary source? There is nothing tin-foil or conspiratorial about the report. A request was made and that request was denied because "the SEC is acknowledging some sort of investigative activity when it asserts this exemption" (Probes) From the primary Probes document: When we report on risk of undisclosed SEC investigative activity for a company, it is based upon a response from the United States Securities and Exchange Commission (SEC) to one of the approximately 2,500 Freedom of Information Act (FOIA) requests we file with the agency each year seek. Our requests seek information concerning the conduct, transactions, and/or disclosures of public companies. There are many legitimate reasons for the government to deny a FOIA request. One reason often cited by the SEC is the so-called “law enforcement exemption” of the FOIA. As a matter of law, the SEC is acknowledging some sort of investigative activity when it asserts this exemption. To learn more about FOIA exemptions, go to FOIA.gov (link is external). To learn more about the law enforcement exemption specifically, see also Department of Justice Guide to the Freedom of Information Act, Exemption 7(A (link is external)). What is happening to this site?
A couple of important things here: (1) The SEC may invoke the law enforcement exception if it is investigating parties who have traded Tesla stock, rather than Tesla itself. Given the amount of speculative trading, high volume, and media coverage of Tesla, it's essentially certain that someone, somewhere, has traded Tesla stock in a way that deserves scrutiny. (2) These types of investigations result in a letter to the company from the SEC, asking about the relationship, if any, between the people being investigated the company. If you run a public company of any level of visibility, these come several times a year. You can make this sound really ominous: "Elon Musk, has Tesla had to respond to any written inquiry from the SEC's investigative division recently?" For a company of Tesla's size & trading volume, the answer to that question is *usually* yes. It very seldom has anything to do with the company itself, just the SEC doing due diligence. (3) In practice, the SEC does not have to justify its refusal to answer a FOIA request. Nor does any federal agency. Given the sensational and relatively information-free nature of this Probes Reporter website, it would not surprise me if the SEC was refusing FOIA requests on the grounds that they're a nuisance and the frivolous use of the SEC's time takes away from true law enforcement activities. Federal agencies have used exactly this justification before. Federal agency compliance with FOIA is uneven and not overseen as well as the "spirit of the law," which is a topic of significant discussion in legal and financial circles right now. So, I can't rule out that the SEC is 'investigating' Tesla, but the frequency of these various types of inquiries makes it more likely than not that this is a false signal. (Full disclosure: I'm an officer in a public company and have held the finance officer role, dealing with our SEC reporting.)
...this just in, Tesla is a massive pyramid scheme with Elon Musk at the tippy toppy pointy bit. (Well, how else do they stay in business?)