The U.S. Securities and Exchange Commission announced the close of an investigation into FCA US LLC and its parent company, Fiat Chrysler Automobiles N.V., which were accused of misleading investors about the number of new vehicles sold to U.S. customers each month.
Without admitting nor denying the findings of a commission set up to investigate the charges, the companies have agreed to pay a $40 million civil penalty and pledged to comply with the provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.
According to the SEC’s order, between 2012 and 2016, FCA US issued monthly press releases falsely reporting new vehicle sales and falsely touting a streak of uninterrupted monthly year-over-year sales growth, when in fact, the growth streak had been broken in September 2013. The companies included those press releases in their SEC filings.
FCA US inflated new vehicle sales results by paying dealers to report fake vehicle sales and maintaining a database of actual but unreported sales, which employees often referred to as a "cookie jar." In months when the growth streak would have ended or when FCA US fell short of other targets, FCA US dipped into the "cookie jar" and reported old sales as if they had just occurred, SEC officials said.
"New vehicle sales figures provide investors insight into the demand for an automaker's products, a key factor in assessing the company's performance," said Antonia Chion, associate director of the SEC's enforcement division. "This case underscores the need for companies to truthfully disclose their key performance indicators."