Tesla Says Justice Department, SEC Are Investigating Model 3 Production Targets (cnbc.com)

Tesla said in a regulatory filing Friday that the SEC and Justice Department are investigating their Model 3 production projections to see if they misled investors. CNBC reports: The filing confirms much of an Oct. 26 article in The Wall Street Journal that said FBI agents were looking at whether Tesla misled investors about production of its Model 3 sedans. The FBI is the principal investigative arm of the Justice Department. The SEC, which just settled its securities fraud investigation against CEO Elon Musk and the company, has separately subpoenaed Tesla for Musk's statements about production rates regarding its popular Model 3 sedan, the company said. DOJ prosecutors have also asked for the same information, although it stopped short of issuing a formal subpoena, the company said in a filing with the SEC. In an interview with Recode's Kara Swisher, Elon Musk denied the validity of the WSJ article.

"The amount of untruthful stuff that is written is unbelievable. Take that Wall Street Journal front-page article about, like, 'The FBI is closing in.' That is utterly false. That's absurd," Musk told Swisher. "To print such a falsehood on the front page of a major newspaper is outrageous. Like, why are they even journalists? They're terrible. Terrible people."

Comments

Re:News for nerds?

[Rei]

Just more "Slashdot's typical terrible coverage".

The criticism of the WSJ article was that it recycled old information and presented it as new. The fact that there had been a DOJ investigation was not news; Tesla confirmed a Bloomberg story on it in September. The request for documents from Tesla happened over a month ago. WSJ made this big front-page "DOJ is closing in!" article based on the fact that... the FBI sought documents and testimony from some former employees. It caused the stock price to plunge, but by the end of the day it had almost fully recovered (and surged past that the next day) as investors realized that they were just recycling a story. Then after the 10-Q repeated the news that broke in, I'll repeat, September (that the DOJ had requested, and been given, documents related to the production ramp), a number of outlets ran prominently with the exact "Tesla confirms DOJ investigation!" article, as if this was actual, new news. They're milking the heck out of this.

FYI: the DOJ case was launched simultaneously with a civil case on the exact same issue. Tesla already won the civil case. Obviously. Seriously: if missing projections while publicly describing what's going on as "production hell" is actionable, then virtually every company in the United States would be bankrupt.

Re:Journalists are getting themselves extinct

[Rei]

In case you're curious, the full context of that quote:

Kara: "You pick fights with the press over Twitter, and then you have all your fans, of which there are many. Are you aware of what they do once you start them off?"

Elon: "Well, I have to say, my regard for the press has dropped quite dramatically."

Kara: "Explain that, please."

Elon: "The amount of untruthful stuff that is written is unbelievable. Take that Wall Street Journal front-page article about, like, “The FBI is closing in.” That is utterly false. That’s absurd. To print such a falsehood on the front page of a major newspaper is outrageous. Like, why are they even journalists? They’re terrible. Terrible people."

Kara: "I get that, but do you understand the mood in this country around the press and the dangers of attacking, especially when the president is doing that? In quite an aggressive, “enemy of the state” and everything else. It’s disturbing when someone like you as a leader does that, too, or goes along with it."

Elon: "The answer is for the press to be honest and truthful, and research their articles and correct things properly when they are false. Which they don’t do."

Kara: "Okay. But I’m asking if you understand where it goes to."

Elon: "Yes, of course I do."

Kara: "What do you think of that? Are you worried about unleashing a dangerous cycle that a lot of the press are worried about? Justifiably."

Elon: "I suggest the press take it to heart and do better."

Kara: "What about what Donald Trump does, about “enemy of the people”? Do you look at it that way?"

Elon: "No."

Kara: "Just that you don’t like falsehoods."

Elon: "Yeah. There are good journalists and there are bad ones, and unfortunately the feedback loop for good versus bad is inverted, so the more salacious that an article is, the more salacious the headline is, the more clicks it’s gonna get. Then somebody is not a journalist, they are an ad salesman."

Kara: "What about things that are just critical of you that you don’t like? Do you think you’re particularly sensitive?"

Elon: "No. Of course not. Count how many negative articles there are and how many I respond to. One percent, maybe. But the common rebuttal of journalists is, “Oh. My article’s fine. He’s just thin-skinned.” No, your article is false and you don’t want to admit it."

Re:Journalists are getting themselves extinct

[Rei]

A great example of the above was the attack series launched by UAW-tied organization "Reveal". First they alleged a high injury rate (with a bunch of BS about beeping forklifts and yellow caution tape being banned) - but Tesla rebutted it by pointing out that they're using old data, that they're around the industry average now, and that the plant used to be the highest injury-rate plant in the US before they bought it. So Reveal switched gears to arguing that they were "hiding" injuries off the books. They even got CAL-OSHA to investigate, and the latter's investigation concluded just recently: the biggest problem they found was an extension cord to a fan that could pose a trip hazard, and one injury whose date was wrong. Vs. its competitors which actually have been found to be hiding injuries off the books, and fined.

Each time the Reveal reports came out, the news was picked up widely. The actual facts? Crickets. Scandal sells. "Wait, there wasn't actually a scandal" doesn't.

Re:News for nerds?

[Rei]

Only if management actually believes said study. At any large organization, there will exist some people people who believe that any given schedule is too optimistic, and will say so. To argue that because some people in an organization expressed concern about a schedule, but management overruled them, that this is criminally actionable, would be to argue that almost any delayed project where anyone protested is actionable. What matters is whether the decision makers believed their own schedules. Aka, the case would be to argue that Musk has no record of excessive optimism about schedules.

Yeah, good luck with that. We're talking about a guy who literally just the other day just fired his Starlink managers because he felt their schedules were too pessimistic.