Fiat Chrysler Automobiles workers who applied for the dependent scholarship program were to receive their money in September, according to a company spokeswoman. (Photo: Kimberly P. Mitchell, Detroit Fr)
DETROIT – Fiat Chrysler Automobiles has agreed to pay $ 40 million to settle US Securities and Exchange Commission fees that it mislead "investors" on the number of new vehicles sold each month to customers in the United States "for several years ending in 2016.
The Company" issued monthly press releases incorrectly reporting new vehicle sales and false display of a & # 39; dash & # 39; uninterrupted monthly sales over the year growth, when in fact the growth rate had been broken in September 2013, "the SEC said, noting that the news headlines were included in the company's SEC filings.
The company, in fact the FCA US and its parent FCA, agreed to pay the $ 40 million civil penalty, but did not admit or deny the SEC's finding.
In a news release Friday, the SEC said the Italian-American carmaker with its U.S. headquarters in Auburn Hills, north of Detroit, also "blew up new vehicle sales r failed by paying dealers to report fake vehicle sales and maintain a database with actual but not reported sales. "
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The database was often referred to like a "cookie jar," the SEC said.
"In months when growth would have ended or when FCA US fell short of other goals, FCA US dipped into the" cookie jar "and reported old sales as if they just happened," the SEC said.
The sales reporting case is also the subject of a whistleblower lawsuit filed by Reid Bigland, a 22-year company veteran who heads the United States Sales and Ram truck mark for the FCA. Bigland said the company had retaliated against him for cooperating with the government's investigation into FCA's sales reporting. Bigland argued that the FCA withheld most of its 2018 compensation as a penalty and intended to use it to pay fines.
The SEC said that accurate reporting of sales figures is important.
"New vehicle sales figures give investors insight into the demand for a car manufacturer's products, a key factor in assessing the company's performance," said Antonia Chion, assistant director of the SEC Division of Enforcement. "This case underlines the need for companies to truly reveal their key performance indicators."
The FCA issued a statement on its cooperation.
"FCA USA cooperated fully in the process of resolving this matter. The Company has reviewed and refined the policies and procedures and is committed to maintaining strong control over sales reporting. The settlement requires a $ 40 million payment that will not have significant impact on the company's financial statements, "the company said.
The sales question came up in 2016. Free Press reported at the time that the FCA was under investigation by the Department of Justice and the SEC and that its "impressive 75-month sales stretch with subsequent sales gains was actually completed in September 2013."
his lawsuit, Bigland said he had inherited the sales reporting methodology, which had been in place since the late 1980s, and it was widely known, including by former CEO Sergio Marchionne, o died last year; and CFO Richard Palmer, from whom he had taken direction.
The FCA announced in 2016 that it revised the sales reporting practice, but the company also said that news media reports at the time "erroneously suggested that potential inaccuracies in monthly data somehow affect the integrity of FCA's reported revenue in the financial statements."
Follow Eric D. Lawrence on Twitter: @_ericdlawrence .
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