Photo: Fiat Chrysler Automobiles
Fiat Chrysler Automobiles is reportedly investigated for fraud and securities violations by the U.S. Justice Department and the Securities and Exchange Commission.
The investigation focuses on allegations previously made by dealers enrolled in FCA’s network in the USA, which complained that the corporation is falsely reporting sales figures.
According to sources quoted by Bloomberg in the Securities and Exchange Commission, the inquiry of the Justice Department is at an early stage, and details are scarce because the matter is confidential. Meanwhile, prosecutors are reportedly preparing a criminal investigation for a potential securities fraud, but this information has not been confirmed yet.
As we previously reported, two FCA dealers in the Chicago area filed civil lawsuits against the Italian-American group, and they accused the automaker of allegedly paying some dealers to report selling more cars than their actual results. At the time, FCA lost approximately $1 Billion in market value after the accusations went public, even if the company denied the claims.
According to Bloomberg, agents from the Federal Bureau of Investigation visited the addresses of the nine people who run Fiat Chrysler business hubs across the USA. The lawyers that represent the dealers that sued Fiat Chrysler Automobiles say that the nine people whose homes were visited by the FBI on July 11 have had conversations about reporting inflated sales inventory.
Like General Motors, Fiat Chrysler Automobiles went through a bankruptcy in 2009, and then the company was bailed out. Fiat obtained full control of Chrysler in 2014 with the aid of the U.S. Government, and its sales figures are carefully monitored to ensure the company will not be at risk again.
According to the lawsuit filed this January, one dealer claims a district manager (one of the nine people questioned by the FBI) proposed a deal falsely to report the sale of 40 vehicles in exchange for $20,000. The same complaint described the sum as a “cooperative advertising support,” which meant that other dealerships might have received similar offers.
FCA is not the only automaker blamed of stating false sales figures by inflating the results of their dealers. BMW has been accused of paying some of its dealers in its network in the USA to put new cars on their replacement service vehicle fleet, so that the company would reach its sales targets. However, the alleged alterations made by BMW are not as severe and problematic as Fiat Chrysler Automobiles’.
According to sources quoted by Bloomberg in the Securities and Exchange Commission, the inquiry of the Justice Department is at an early stage, and details are scarce because the matter is confidential. Meanwhile, prosecutors are reportedly preparing a criminal investigation for a potential securities fraud, but this information has not been confirmed yet.
As we previously reported, two FCA dealers in the Chicago area filed civil lawsuits against the Italian-American group, and they accused the automaker of allegedly paying some dealers to report selling more cars than their actual results. At the time, FCA lost approximately $1 Billion in market value after the accusations went public, even if the company denied the claims.
According to Bloomberg, agents from the Federal Bureau of Investigation visited the addresses of the nine people who run Fiat Chrysler business hubs across the USA. The lawyers that represent the dealers that sued Fiat Chrysler Automobiles say that the nine people whose homes were visited by the FBI on July 11 have had conversations about reporting inflated sales inventory.
Like General Motors, Fiat Chrysler Automobiles went through a bankruptcy in 2009, and then the company was bailed out. Fiat obtained full control of Chrysler in 2014 with the aid of the U.S. Government, and its sales figures are carefully monitored to ensure the company will not be at risk again.
According to the lawsuit filed this January, one dealer claims a district manager (one of the nine people questioned by the FBI) proposed a deal falsely to report the sale of 40 vehicles in exchange for $20,000. The same complaint described the sum as a “cooperative advertising support,” which meant that other dealerships might have received similar offers.
FCA is not the only automaker blamed of stating false sales figures by inflating the results of their dealers. BMW has been accused of paying some of its dealers in its network in the USA to put new cars on their replacement service vehicle fleet, so that the company would reach its sales targets. However, the alleged alterations made by BMW are not as severe and problematic as Fiat Chrysler Automobiles’.
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