Fiat Chrysler to pay $40 mil. for overstating sales numbers
DETROIT (AP) — Fiat Chrysler is paying $40 million to settle with U.S. securities regulators who say the automaker misled investors by overstating its monthly sales numbers over a five-year period.
The Italian-American company inflated sales by paying dealers to report fake numbers from 2012 to 2016, the U.S. Securities and Exchange Commission alleged in a complaint.
Fiat Chrysler agreed to pay the civil penalty and to stop violating antifraud, reporting and internal accounting control regulations, the SEC said Friday in a statement. The automaker did not admit or deny the agency’s allegations, the statement said.
“This case underscores the need for companies to truthfully disclose their key performance indicators,” Antonia Chion, associate director in the SEC’s Enforcement Division, said in the statement. She noted that the new vehicle sales figures give investors insight into the demand for an automaker’s products, a key to assessing the company’s performance.
Fiat Chrysler said it has reviewed and refined its sales reporting procedures. It said the payment will not have a large impact on its financial statements.
The agency said the automaker boasted about a streak of year-overyear sales increases into 2016, when the streak actually was broken in September of 2013.
When the company disclosed the sales scheme in 2016, it said that it had a “reserve” stock of cars that had been shipped to big fleet buyers such as rental car companies but not recorded as sales.
The SEC said employees called this database of actual but unreported sales the “cookie jar.” The company dipped into those sales to stop the streak from ending, or when it would have missed other sales targets.
A Fiat logo pictured on a car in Milan, Italy, in this Jan. 2, 2014 file photo.