FCA Being Charged $40-Million For Falsely Inflating Sales Figures, Misleading Investors
Automaker, Fiat Chrysler Automobiles is in hot water with its investors after the Auburn Hills company was fined $40-million by the Securities and Exchange Commission.
FCA was charged for misleading investors and falsely inflating the number of new vehicles sold each month to customers in the United States.
It’s being reported FCA fixed sales figures to make it seem like the automaker was performing better than it actually was. The company allegedly paid dealers to falsify new car sales while maintaining a database of unreported vehicle sales.
Between 2012 and 2016, FCA issued monthly press releases falsely reporting new vehicle sales and falsely touting a “streak” of uninterrupted monthly year-over-year sales growth, when in fact, the growth streak had been broken in September 2013. FCA US and Fiat Chrysler Automobiles included the press releases in their SEC filings. New vehicle sales and the growth streak were key performance indicators that illustrated the company’s competitive position and demand for its vehicles. The SEC’s order finds that 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 often 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 if they had just occurred.
FCA US and Fiat Chrysler Automobiles have agreed to pay $40 million to settle the charges.