Carvana Chief Financial Officer Mark Jenkins said on the company's earnings call Wednesday that the company has fully disclosed all related-party transactions in its financial statements, rebutting short seller allegations of inadequate financial disclosure. The call content waspublished via meeting minutes released by Seeking Alphaand made public.

This statement marks the latest development in a long-running controversy over the accounting practices of the used-car platform headquartered in Phoenix, Arizona. According to a 2021 Wall Street Journal report, the dispute has long centered on the company's reporting processes for auto loans.

Jenkins made these remarks on the same day that short seller Gotham City Research released a reportaccusing Carvana of relying on related-party transactions "beyond what it has disclosed". Previously, the short seller had issued a report on January 28 claiming that Carvana had inflated earnings by up to $1 billion due to this reliance.

"We have gone through every detail of these short reports to ensure that all our reports are completely accurate, and we clearly state that these reports are 100% inaccurate," Jenkins said on the call, as quoted inSeeking Alpha's meeting minutes. "We do not sell loans to related parties. We disclose related-party transactions, and there is no ambiguity about that."

After Jenkins responded to analysts' questions about related-party transactions in the report, Carvana CEO, President, and Chairman Ernest Garcia III made a "friendly request" to investors.

"If we receive another short report during the year-end quiet period, please look back at the past few years to identify the pattern," Garcia told investors.

At the heart of the controversy is the family relationship between Carvana's founder and its largest shareholder, and whether the used-car marketplace they operate has been adequately disclosed in financial reports and U.S. Securities and Exchange Commission (SEC) filings.

Carvana's largest shareholder is Ernest Garcia II. According to aForbes profile, he owns and operates the Arizona-based used-car platform DriveTime, and DriveTime's Bridgecrest Credit Company serves as its financing arm, according to the Wall Street Journal. His son, Ernest Garcia III, originally founded Carvana as a DriveTime subsidiary before spinning it off as an independent company.

"We maintain a business relationship with DriveTime, and DriveTime is a related party due to the control and ownership of substantially all of DriveTime's interests by various Garcia family parties," Carvana stated in itslatest 10-K filing for fiscal year 2025submitted to the SEC. "We have entered into various agreements with DriveTime and its affiliates, which cannot be assumed to have been negotiated on an arm's-length basis."

In its two reports,short seller Gotham City allegedthat "the securitization SEC filings and disclosures to the SEC by Carvana, DriveTime, and/or Bridgecrest fundamentally misrepresent and omit material activities among them."

The February 18 report cited a support page on Carvana's websitethat lists Bridgecrest as its third-party loan servicing provider, rather than as a related party. Gotham City's research also detailed multiple instances it found where Bridgecrest, not Carvana, was the lienholder on loans, and questioned the mechanics of such transfers—citing as evidence Carvana's responses to consumer complaints to the Better Business Bureau, in which the used-car platform listed the financing provider as the lienholder.

Carvana did not immediately respond to a request for clarification regarding the wording of its support page.

The intricate relationship between Carvana and DriveTime and how it handles loans have long been under scrutiny: In January 2025, the now-defunct short seller Hindenburg Research released its own report on Carvana, accusing it ofsuspectedly selling $800 million in loans to "undisclosed related parties"。

"Carvana appears to have shifted unreported costs of extended warranties to related party DriveTime, artificially inflating revenue and profitability," read a statement from Hindenburg Research.

Meanwhile, according to a 2021 Wall Street Journal report, Carvana's auditor Grant Thornton had flagged its loan fronting practices as a critical audit matter—not deemed an abuse of rules, but noted as a particularly complex issue.

In its February 18 report, Gotham City expressed concern that the company's current auditor, Grant Thornton, might resign, and predicted "an independent investigation into these discrepancies."

According to Nasdaq data, Carvana's stock is down about 16% year-to-date. Despite missing EBITDA expectations, the company posted record full-year revenue and net income.Net income increased by more than $1 billion from the prior yearto $1.9 billion, according to its financial statements. Full-year revenue grew 49% year-over-year, exceeding $20 billion.