FCA Lied About U.S. Sales Figures, Now It Has To Pay $40 Million Fine
30 September 2019 - autoevolution
No fewer than $40 million “for misleading investors.”
That's how the Securities and Exchange Commission describes the illegal reporting of vehicles sold each month by Fiat Chrysler Automobiles in the United States, and that amount of money is supposed to wipe off the wrongness from 2012 through 2016.
A statement from the U.S. SEC reads that Fiat Chrysler's growth streak had been broken in September 2013 if it weren't for the inflated results. Dealers were paid by FCA to report the fake numbers all while maintaining a database of actual but unreported results, which goes to show that this was a concerted effort.
In months when the growth streak would've ended, the Michigan-based automaker "dipped into the cookie jar" to keep the investors happy without their knowledge or consent of the dealer-backed arrangement. "This case underscores the need for companies to truthfully disclose their key performance indicators," declared Antonia Chion, associate director in the enforcement division.
Violating the antifraud provisions of the Securities Act of 1933 is a bid deal, more so when you remember that Fiat Chrysler has also wronged the Securities Exchange Act of 1934. The most embarrassing about this whole mess-up and mop-up is that $40 million are enough to halt investigations without FCA admitting or denying the commission's findings. The civil penalty comes with strings attached, namely Fiat Chrysler Automobiles won't cause future violations of these provisions.
FCA US LLC doesn't seem to care too much about being caught with the trousers down, stating that "the company has reviewed and refined its policies and procedures" regarding sales reporting. The payment "will not have a material impact on the financial statements of the company," but then again, $40 million is a lot of money for an automaker with lower budgets than GM and FoMoCo.
Reid Bigland, the U.S. sales chief at Fiat Chrysler Automobiles, sued FCA in May 2019 over withholding 90 percent of his compensation from 2018 because he cooperated with SEC investigators. Bigland told the watchdog that Chrysler's been doing this since the later 1980s, a practice that was known throughout the upper echelons all the way up to Sergio Marchionne.