Daimler Whistleblower Scandal: The Fall of a Wall Street Darling

NEW YORK (RichTVX.com) — It was surprising to many Wall Street analysts how such a Daimler disaster could happen, particularly involving a company like Daimler, now known as the Mercedes-Benz Group AG, which publicly prided itself on business ethics and corporate social responsibility—Mercedes-Benz Group DDAIF stock flashed red already. It did seem clear that several evil decisions were made in the past at the Daimler AG. The public debate began immediately on whether the result of these decisions indicated ethical or management problems and whether these problems were endemic to the car industry, or resided within Daimler itself. To help answer these questions, a special task force must be formed to investigate the root causes of the tragedy and who among the various players involved with the Daimler scandal bore responsibility for the tragedy. As already reported here, a father was spending four years in prison even though he was innocent. He lost four years of his life, endured severe pain, and suffered with a permanent handicap, but he never regretted holding on to the truth. He was imprisoned because a large German corporation perverted the course of justice by corrupt means, and despite being a wealthy man, he lost everything he had and he died in abject poverty. A whole family was destroyed by these events, according to the leaked United States Securities and Exchange Commission (“SEC”)’s documents* filed against Daimler AG, (which changed its name to Mercedes-Benz Group AG). A whistleblower has submitted original information to the SEC. Perhaps one of the most credible whistleblowers to go to the United States Government. He explored the ethical misconduct scandal at Daimler AG. The Daimler whistleblower’s strategy of turning to the SEC may represent the most potent threat to the Mercedes-Benz Group AG (Previously Daimler), and the SEC is likely to give those allegations serious weight. The SEC Form TCR (Tip, Complaint or Referral) is the form whistleblowers and their attorneys use to submit tips to the SEC Whistleblower Office.

Yale School of Management

Mercedes-Benz & Daimler Truck Ended Up On The Yale—”List of Shame”

In his report to the SEC, the Daimler whistleblower stated violations of the Foreign Corrupt Practices Act, including at a minimum,15 U.S.C. §§ 78m(b)(2)(A), 78 m(b)(5), and 78ff(a), 15, U.S.C. §§ 78dd-1(a)(1)(A)(i) and (a)(3)(A)(i), as well as violations of 18 U.S.C. 2 and 18 U.S.C. 371, the SEC complaint says. More allegations were listed in the “Facts Pertaining To The Alleged Violations” document provided by the whistleblower. There is a confluence of factors lining up against the Mercedes-Benz Group AG. The Daimler whistleblower documents, which formed the basis of a series in the Rich TVX News Network, have generated some urgency for regulators to respond; the U.S. Securities and Exchange Commission under chair Gary Gensler is well known by now of converting whistleblower complaints into agency action at a record clip. For such a high ranking corporation, Mercedes-Benz Group AG could really do much better for its 172.400 employees, it is well known that Gary Gensler has made a priority of improving corporate disclosures, a matter that lies at the heart of the Daimler whistleblower complaint. Whistleblower allegations are something the U.S. Securities and Exchange Commission is taking it very seriously—the SEC has urged whistleblower to come forward. Public opinion indicates that people around the world consider corporate social responsibility an important aspect of business dealings. The Mercedes-Benz public relations department, which is responsible for the Mercedes-Benz Group AG’s brand management, has completely failed. Both Mercedes-Benz Group AG (Previously Daimler), and Daimler Truck Holding AG are already listed in “The List of Shame” by the Yale School of Management, created by Yale business professor Jeffrey Sonnenfeld, his colleague Steven Tian, and the Yale research team. Read more here. Therefore, both companies are branded as having managers which are more concerned about short-range profits and rewards for executives than on their reputation. The Yale List focuses on ethical failures in order to relate corporate responsibility to business ethics. We always felt that ethical behavior cannot and should not be separated from effective management. Effective strategic management is fundamental to business enterprise and must be integrated into a model of business ethics and corporate social responsibility. And, by the way, who wants to work for such autocratic—some say arrogant—management. Their workers can only feel embarrassed by the continuing Daimler whistleblower’s allegations, and the fact that the arrogant management does not care about reputation at all. So what are the responsibilities of the global business of Mercedes-Benz cars? Some have argued that the business of Mercedes-Benz cars is purely economic and that other organizations should engage in the creation of social goods. However, many business leaders have moved to an acknowledgement of the social responsibilities of enterprise and some customers value corporate social responsibility. Perhaps no one depicted the flavor of the Daimler culture better than the Daimler whistleblower. Disclaimer: The views expressed in the whistleblower documents are those of the author(s) and do not necessarily represent the views of Rich TVX News Network, or its management. All the charges are accusations of the whistleblower, according to the SEC Complaint documents, and all defendants are presumed innocent until and unless proven guilty.

Gary Gensler

Gary Gensler (born October 18, 1957) is an American government official and former investment banker serving as the chair of the U.S. Securities and Exchange Commission.^[1] Gensler previously led the Biden–Harris transition‘s Federal Reserve, Banking, and Securities Regulators agency review team.^[2] He is also a professor in the practice at the MIT Sloan School of Management.

Gensler served as the 11th chairman of the Commodity Futures Trading Commission, under President Barack Obama, from May 26, 2009 to January 3, 2014. He was the Under Secretary of the Treasury for Domestic Finance (1999–2001), and the Assistant Secretary of the Treasury for Financial Markets (1997–1999). Prior to his career in the federal government, Gensler worked at Goldman Sachs, where he was a partner and co-head of finance. Gensler also served as the CFO for the Hillary Clinton 2016 presidential campaign.^[3] President Joe Biden nominated Gensler to serve as 33rd chair of the U.S. Securities and Exchange Commission.^[4] He succeeded SEC Acting Chair, Allison Lee.

U.S. Securities and Exchange Commission

The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929.^[2][3][4] The primary purpose of the SEC is to enforce the law against market manipulation.^[5][6]: 2

In addition to the Securities Exchange Act of 1934, which created it, the SEC enforces the Securities Act of 1933, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Sarbanes–Oxley Act of 2002, and other statutes. The SEC was created by Section 4 of the Securities Exchange Act of 1934 (now codified as 15 U.S.C. § 78d and commonly referred to as the Exchange Act or the 1934 Act).^[7]

Mercedes-Benz Group

The Mercedes-Benz Group AG (previously named Daimler-Benz, DaimlerChrysler and Daimler) is a German multinational automotive corporation headquartered in Stuttgart, Baden-Württemberg, Germany. It is one of the world’s leading car manufacturers. Daimler-Benz was formed with the merger of Benz & Cie. and Daimler Motoren Gesellschaft in 1926. The company was renamed DaimlerChrysler upon acquiring the American automobile manufacturer Chrysler Corporation in 1998, and was again renamed Daimler AG upon divestment of Chrysler in 2007. In 2021, Daimler AG was the second-largest German automaker and the sixth-largest worldwide by production. In February 2022, the company was renamed to its current name.

The Mercedes-Benz Group’s marques are Mercedes-Benz for cars and vans (including Mercedes-AMG and Mercedes-Maybach) and Smart. It has shares in other vehicle manufactures such as Daimler Truck (founded as a wholly owned subsidiary of the group), Denza, BAIC Motor and Aston Martin.

By unit sales, the Mercedes-Benz Group is the thirteenth-largest car manufacturer. The group provides financial services through its Mercedes-Benz Mobility arm. The company is a component of the Euro Stoxx 50 stock market index.^[4] In the Mercedes-Benz complex in Stuttgart are situated the central company headquarters, the Mercedes-Benz offices, a car assembly plant, the Mercedes-Benz Museum and the Mercedes-Benz Arena.

Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act of 1977 (FCPA) (15 U.S.C. § 78dd-1, et seq.) is a United States federal law that prohibits U.S. citizens and entities from bribing foreign government officials to benefit their business interests.^[1]

The FCPA is applicable worldwide and extends specifically to publicly traded companies and their personnel, including officers, directors, employees, shareholders, and agents. Following amendments made in 1998, the Act also applies to foreign firms and persons who, either directly or through intermediaries, help facilitate or carry out corrupt payments in U.S. territory.^[2]

Pursuant to its anti-bribery purpose, the FCPA amends the Securities Exchange Act of 1934 to require all companies with securities listed in the U.S. to meet certain accounting provisions, such as ensuring accurate and transparent financial records and maintaining internal accounting controls.^[3]

The FCPA is jointly enforced by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), which apply criminal and civil penalties, respectively.^[4]

Since its passage, the FCPA has been subject to controversy and criticism,^[5] namely whether its enforcement discourages U.S. companies from investing abroad.^[6] The Act was subsequently amended in 1988 to raise the standard of proof for a finding of bribery.^[4]