Fiat Chrysler ‘cooperating’ with federal investigators – The Detroit News
Fiat Chrysler Automobiles NV on Monday said it is cooperating with federal investigators who are probing the automaker’s U.S. sales reporting practices.
The automaker, in a statement, confirmed it is “cooperating with an (U.S. Securities and Exchange Commission) investigation into the reporting of vehicle unit sales to end customers in the U.S.” It went on to say it “will cooperate fully” with “inquires into similar issues” recently made by the U.S. Department of Justice.
“FCA will cooperate fully with these investigations,” the company said, adding a description of how the company records its shipments: “In its annual and quarterly financial statements, FCA records revenues based on shipments to dealers and customers and not on reported vehicle unit sales to end customers.”
The statement followed a Bloomberg News report that said the Justice Department is in the early stages of scrutinizing whether the carmaker violated U.S. securities laws.
The news outlet did not clarify what the investigation involved, but mentioned a civil lawsuit against Fiat Chrysler from earlier this year over its U.S. sales reporting practices “may provide clues about what prosecutors are looking at.”
Separately, Automotive News later Monday afternoon reported investigators from the FBI and the Securities and Exchange Commission visited Fiat Chrysler field staff in their homes and offices this month as part of a coordinated investigation into the automaker’s U.S. sales reporting practices.
Officials with the FBI and the Justice Department did not immediately respond for comment. A Fiat Chrysler spokeswoman declined to comment on the reported activity of the FBI.
In January, two Fiat Chrysler dealerships filed a civil racketeering suit against the automaker, alleging the company offered dealers money to report unsold vehicles as sold.
The federal lawsuit alleged that the automaker’s North American-based operations “knowingly endorses and encourages the false reporting of motor vehicle sales by directly rewarding its local managers … with monetary and quarterly bonuses which are directly related to reported vehicle sales numbers,” among other claims.
The establishments are seeking a judgment against the automaker as well as unspecified monetary damages that include attorney’s fees, costs and “such other relief as this court deems just and equitable.” A lawyer for the dealer group did not immediately respond for comment.
Fiat Chrysler at the time said the “claim is without merit” and filed concurrently with the automaker discussing with the dealer group the need to meet its obligations under some of its dealer agreements.
The suit specifically alleges that dealership principal Edward Napleton was asked to falsely sales of 40 vehicles in exchange for $20,000 that would have been distributed to him “as a credit under the disguise as cooperative (”Co-Op”) advertising support.” Napleton, the suit says, “soundly rejected” the alleged proposal.
FCA US at the time of the lawsuit had recorded 69 consecutive months of year-over-year sales gains — a streak that continued through the first half of this year.
However, starting with March sales, Fiat Chrysler stopped mentioning the sales streak in monthly press releases and added sections about determining monthly sales and forward-looking statements.
Fiat Chrysler’s U.S. sales were up about 6 percent to 1.15 million vehicles through the first six months of the year.
Fiat Chrysler shares on the New York Stock Exchange were about even during early afternoon trading to $6.78.