Fiat Chrysler to pay $40 mil. for over­stat­ing sales num­bers

The Korea Times - - World Business -

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.

AP-Yon­hap

A Fiat logo pic­tured on a car in Mi­lan, Italy, in this Jan. 2, 2014 file photo.

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