The Associated Press
Published Friday, September 27, 2019 1:09 PM EDT
Last updated Friday, September 27, 2019 14:49
DETROIT – Fiat Chrysler is paying $ 40 million to settle with US securities regulators who say the automaker has misled investors by overestimating its monthly sales figures over a five-year period.
The Italian-American company increased sales by paying dealers to report false figures from 2012 to 2016, the US Securities and Exchange Commission said in a complaint.
Fiat Chrysler has agreed to pay the civil penalty and stop violating anti-fraud regulations, reporting and internal accounting controls, the SEC said in a statement. The automaker did not admit or deny the agency's allegations, the statement said.
"This case underscores the need for companies to honestly disclose their key performance indicators," said Antonia Chion, associate director of the SEC Execution Division, in a statement. She noted that the new vehicle sales figures provide investors with insight into an automaker's product demand, a key to gauging the company's performance.
Fiat Chrysler said it has revised and refined its sales reporting procedures. He said the payment will not have a major impact on his financial statements.
The agency said the automaker boasted a series of year-on-year sales increases in 2016, when the series was broken in September 2013.
When the company released its sales scheme in 2016, it said it had a "spare" inventory of cars that had been shipped to large fleet buyers, such as car rental companies, but not registered as sales.
The SEC said employees called this database of actual but unreported sales "cookie jar." The company plunged into these sales to prevent the series from ending or when it would have missed other sales targets.
Fiat Chrysler said it now records sales as vehicles are shipped to customers. The company also takes steps to ensure that a sale is immediately subtracted from its books when it finds that the deal has been closed because the buyer has given up or failed to obtain financing.
The SEC investigation is another of a long series of legal issues for Fiat Chrysler. It also faces federal investigations into unlawful payments to union officials through a training center and a criminal investigation into allegations that its diesel-powered trucks were designed to mislead emissions testing. The company denied cheating, but federal prosecutors accused an engineer earlier this week and said he conspired with others.
In June, Fiat Chrysler's head of sales in the US sued the company for claiming that it withheld 90% of its payment package because it testified in the SEC investigation into its sales reports.
Reid Bigland claimed that Fiat Chrysler violated Michigan's Whistleblower Protection Act by retaliating against him over his testimony.
Bigland, who is still with the company, claimed in his suit that he inherited the sales reporting system when he took over the top job in 2011. When a dealer sued the company for the reporting system in 2016, Fiat Chrysler reported problems to the SEC. , according to the documents.
The company, in its move to transfer the case to federal courts, tried to cast doubt on Bigland's complaints. He said Bigland acknowledged that Fiat Chrysler reported the problems themselves and did not testify voluntarily before the commission.