FCA Concern Paid Fines for Increased SalesSeptember 30, 2019
The Italian-American concern Fiat Chrysler Automobiles had to pay a fine of $ 40 million. The fact is that the automaker significantly overestimated the sales reports of its cars.
Back in 2016, the Department of Justice and the Securities and Exchange Commission (SEC) launched an investigation into the misleading sales reports of the Italian-American concern Fiat Chrysler Automobiles.
Now, after more than three years, the automaker has agreed to pay $ 40 million to resolve all issues.
For those of you who are not familiar with this business, we explain. Between 2012 and 2016, the guys from FCA published incorrect reports on new car sales, falsely advertising continuous monthly sales growth compared to last year. These numbers were considered key factors that indicate a company’s competitiveness. However, in fact, the growth bar ended for the concern in September 2013.
“New car sales data provide investors with insight into the demand for automaker products, which is a key factor in evaluating company performance,” explains Antonia Chion, deputy director of the Law Enforcement Division of the Securities and Exchange Commission. “This case underlines the need for companies to reliably disclose their key market performance indicators.”
According to the findings of SEC experts, Fiat Chrysler Automobiles even paid dealers to report fake car sales and increase the database of actual but not registered sales. Employees often called it a “cookie jar,” from where dealers “took” old sales, as if they had occurred only in the months when the growth bar would have ended — that is, they simply registered the same sale several times.
As a result, the concern’s activities are considered a gross violation of the provisions of the Securities Fraud Act of 1933 and the Securities Act of 1934, as well as accounting regulations.
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