Fiat Chrysler to pay $40 million over claims it misled investors

A row of Fiat Chrysler Automobiles (FCA) 2017 Chrysler Pacifica minivan vehicles are displayed for sale at a car dealership in Moline, Illinois, on July 1, 2017.Daniel Acker | Bloomberg | Getty ImagesDETROIT — Fiat Chrysler has agreed to pay $40 million over claims it misled investors about its reporting of monthly vehicle sales in recent years.The Securities and Exchange Commission announced the fine Friday after a yearslong investigation into the Italian-American automaker’s reporting methodology of monthly U.S. sales. The company, according to the SEC, has agreed to pay the fine to settle the charges.Fiat Chrysler shares were relatively unchanged after opening Friday at $12.98. The stock is down about 11% for the year.According to the SEC, Fiat Chrysler from 2012 to 2016 issued monthly press releases about U.S. sales that falsely reported new vehicle sales and falsely touted a “‘streak’ of uninterrupted monthly year-over-year sales growth, when in fact, the growth streak had been broken in September 2013.”Fiat Chrysler, in a statement Friday, said the company “cooperated fully in the process to resolve this matter.””The company has reviewed and refined its policies and procedures and is committed to maintaining strong controls regarding its sales reporting,” the company said. “The settlement requires a payment of $40 million which will not have a material impact on the financial statements of the company.”Fiat Chrysler, according to the SEC, inflated monthly vehicle sales to customers by paying dealers to report fake sales, which were later “unwound” or reversed. It also failed to report all actual sales in the months in which they were made. Instead, the automaker’s North American unit maintained a database of actual but unreported sales, according to an order from the SEC.Fiat Chrysler, amid the investigation and a lawsuit from two dealers about its sales reporting, in July 2016 revised more than five years of monthly U.S. vehicle sales to reflect a new reporting methodology.The SEC found that Fiat Chrysler violated the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, as well as the reporting, books and records, and internal accounting controls provisions of the exchange act.Antonia Chion, associate director of the SEC Division of Enforcement, said the case “underscores the need for companies to truthfully disclose their key performance indicators.”Fiat Chrysler, following several other automakers, now reports U.S. sales on a quarterly basis.As part of the settelement, Fiat Chrysler did not admit or deny wrongdoing, according to the SEC. 

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