CARVANA CO
CVNA
Consumer Discretionary
2
exclusion reasons
1 theme
This page is part of our public exclusion list — a transparency tool that shows which companies we screen out and why. It is not investment advice, and it is not an accusation. But it is subject to change as our understanding of the facts evolves.
In August 2021, the District Attorneys of Los Angeles, San Diego, Santa Clara, and Ventura counties obtained an $850,000 settlement against Carvana for operating in California without required dealer and transporter licenses. Carvana sold cars to California consumers from 2015 but did not obtain a dealer's license until May 2019, and delivered vehicles using its own fleet without a transporter's license beginning in 2017.
The regulatory exposure has deepened substantially since. In June 2025, the SEC issued a subpoena to Carvana seeking information related to accounting irregularities and related-party transactions. In January 2025, Hindenburg Research reported that it uncovered $800 million in loan sales to a suspected undisclosed related party and documented how accounting manipulation fueled temporary reported income growth. In January 2026, Gotham City Research alleged that hidden relationships with entities controlled by co-founder Ernest Garcia II — including DriveTime, Bridgecrest, and GoFi — overstated Carvana's earnings by over $1 billion. Carvana's stock dropped over 20% on the Gotham City report. The SEC investigation remains ongoing as of early 2026.
Connecticut AG $1.5M settlement (Jan 2025): Carvana failed to provide vehicle titles and registration documents for months post-purchase, leaving consumers with unregistered vehicles while facing loan payments and fines. Settlement also resolved deceptive vehicle inspection claims — cars delivered with undisclosed body damage and missing safety features despite marketing promises.
Research Sources
4 organizations
Related Exclusions
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A digest of changes to our exclusion list — new additions, removals, and the evidence behind them. We review the list continuously as new evidence surfaces.
Companies appear on our exclusion list based on our investment judgment — not because they've done anything illegal. This is a difference of values and opinion, not an accusation of wrongdoing. Exclusion does not constitute a recommendation against investing in any company, and absence from the list does not constitute a recommendation to invest.
This information is provided for educational and transparency purposes only and should not be relied upon as investment advice. Data is drawn from independent watchdogs, NGOs, government registries, and Ethical Capital's ongoing research — see Research Sources for the full list.
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