1/ I have read and reread the SOX whistleblower complaint by Karl Hansen. I believe there is an explosive accusation embedded in that document that is being widely overlooked. If this accusation is true, it should spell HUGE trouble for $TSLA and Elon. Let's review. $TSLAQ
2/ First, here is the link to the complaint, with a thanks to @MikeFlo46795160 for publishing it yesterday. Important disclosure: I'm not an attorney. I do, however, have extensive corporate experience and training on SOX related issues. $TSLAQ
drive.google.com/file/d/0B6bZ_p…
3/ Forget Mexican drug cartels and employee theft. THIS is where things get interesting to me. Two days after the infamous funding secured tweet, Hansen files a whistleblower complaint with the SEC. $TSLAQ
4/ But Hansen ain't no fool. He does something very few whistleblowers have the courage and/or smarts to do. He formally informs $TSLA management that he has filed his complaint. $TSLAQ
5/ Why does this matter? Sarbanes-Oxley establishes substantial protections for whistleblowers and mandates that corporate officers create internal systems of controls to ensure whistleblowers are both encouraged to come forward and protected if they do. $TSLAQ
6/ Specifically, the audit committee must ensure systems are in place to both encourage and protect whistleblowers. Hansen focused his SEC whistleblower complaint on the inappropriate accounting arising from his investigations of alleged internal crimes. Again, very smart. $TSLAQ
7/ Once an employee has identified themselves as a whistleblower, things change substantially. At most normal companies, this would trigger significant management attention and careful adherence to legal obligations. Why? If you don't, you can end up in jail. For 10 years. $TSLAQ
8/ Let's go back to the juicy stuff. The DAY AFTER $TSLA is informed by Hansen that he filed a SOX whistleblower complaint, he is angrily confronted by Elon. Allegedly, Elon makes what a reasonable person could construe as a threat.
9/ According to his complaint, Hansen is subsequently punished by $TSLA. If true, this is clear cut retaliation. A textbook violation of Section 1107. $TSLAQ
10/ Let's be very clear about something. IT IS ABSOLUTELY INSANE for an officer of a publicly traded company to confront a confirmed SOX whistleblower. It is a COMPLETE BREAKDOWN of internal controls. It can't happen. Utterly nuts. $TSLAQ
11/ But not just any officer. We are talking about the CEO OF THE COMPANY personally confronting a whistleblower, and then apparently efforts were made to overtly and directly retaliate. This is absolutely bonkers. My jaw dropped when I read this part of the complaint. $TSLAQ
12/ Will anything happen to Elon and $TSLA? Who knows? He has certainly been above the law thus far. But Hansen laid a perfect trap, and Elon walked right in it. Trade carefully. $TSLAQ
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