- The Securities and Exchange Commission (SEC) on Friday charged Michigan-based automaker FCA US LLC, and its parent company, Fiat Chrysler Automobiles N.V., with misleading investors about the number of new vehicles sold each month to customers in the U.S.
- The companies have agreed to pay $40 million to settle the charges.
- FCA US issued monthly press releases from 2012 to 2016 touting a "streak" of uninterrupted monthly year-over-year sales growth, but the growth streak was broken in September 2013, the SEC said. The companies included the press releases in their SEC filings.
New vehicle sales and the growth streak are key performance indicators that illustrated the company's competitive position and demand for its vehicles, the SEC said.
In its order, the SEC said FCA US inflated new vehicle sales results by paying dealers to report fake vehicle sales and maintaining a database of actual but unreported sales, which employees referred to as a "cookie jar."
In months when the growth streak would have ended or when FCA US fell short of other targets, FCA US dipped into the "cookie jar" and reported old sales as though they had just occurred, according to the regulator.
"New vehicle sales figures provide investors insight into the demand for an automaker's products, a key factor in assessing the company's performance," said Antonia Chion, associate director of the SEC's enforcement division. "This case underscores the need for companies to truthfully disclose their key performance indicators."
The SEC charged the companies with violating anti-fraud and other provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.
The companies agreed to cease and desist from the practice and will pay a civil penalty of $40 million.