Photo: GM
Several federal prosecuters have joined forces and are currently doing their homework in order to charge General Motors with fraud over the notorious defective ignition switch recall. Evidence of misleading statements spanning over 10 years are at the center of the upcoming case intended for the automaker.
A short time after GM made the first ignition switch recall public earlier this year, federal prosecutors from the U.S. Justice Department found out documents showing that higher-ups knew about the potentially deadly switches as early as 2004. After the Ford-Firestone tire controversy, the TREAD Act was passed in 2000, which basically outlines early reporting requirements and establishes criminal liability for intentional violations.
Even though General Motors has already been fined quite a low amount of money for failing to report the defect to the National Highway Traffic Safety Administration on time and the carmaker has agreed to pay a $35 million fine over the mishandled ignition switch mess-up, a federal criminal settlement may build up the grand total to many more tens of millions if the prosecutors feel considerate about the fiasco.
Some reports state that General Motors is currently facing smaller criminal investigation in different U.S. states, but a grand federal charge such as the one in the making at this moment could have a great impact in the automaker's fight to maintain its liability shield against 2008 pre-bankruptcy claims. Needless to say, if the outcome turns out for the worse, GM stock holders will start losing their trust in the company.
Furthermore, Toyota's accidental acceleration saga may be used as a potential parallel to General Motors' situation. Back in 2010, the Japanese manufacturer paid almost $17 million for not disclosing the defects in due time, with federal prosecutors managing to make Toyota pay a further $1.2 billion over a separate criminal case.
Even though General Motors has already been fined quite a low amount of money for failing to report the defect to the National Highway Traffic Safety Administration on time and the carmaker has agreed to pay a $35 million fine over the mishandled ignition switch mess-up, a federal criminal settlement may build up the grand total to many more tens of millions if the prosecutors feel considerate about the fiasco.
Some reports state that General Motors is currently facing smaller criminal investigation in different U.S. states, but a grand federal charge such as the one in the making at this moment could have a great impact in the automaker's fight to maintain its liability shield against 2008 pre-bankruptcy claims. Needless to say, if the outcome turns out for the worse, GM stock holders will start losing their trust in the company.
Furthermore, Toyota's accidental acceleration saga may be used as a potential parallel to General Motors' situation. Back in 2010, the Japanese manufacturer paid almost $17 million for not disclosing the defects in due time, with federal prosecutors managing to make Toyota pay a further $1.2 billion over a separate criminal case.
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