Fiat Chrysler Ponies Up $110 Million to Soothe Angry Investors
A lawsuit filed against Fiat Chrysler Automobiles way back in 2015 has reached its conclusion. In order to temper the ire of shareholders angered by the company’s EcoDiesel blunder and earlier suspension recall controversy, FCA has agreed to hand over $110 million, closing the door on a contentious chapter of its history.
The suit covered a large group of investors who bought FCA stock between certain dates in 2014 and 2017. The investors claim the automaker mislead them into thinking everything was above-board in terms of compliance with safety and emissions regulations.
Flash back to earlier this decade. FCA earned itself a federal rebuke after failing to properly carry out 23 recalls on certain truck and SUV models. The vehicles, dating back to as early as 2008, were fitted with suspension components that could break, leading to loss of control. While the automaker ultimately offered to buy back more than half a million of the vehicles, investors claim FCA misled than about the state of its finances in relation to the recalls.
In 2015, Fiat Chrysler settled allegations with the National Highway Traffic Safety Administration that it failed to properly complete 23 recalls affecting more than 11 million vehicles. It paid a $105 million U.S. penalty, conducted additional recalls and agreed to buy back hundreds of thousands of vehicles.
The securities suit also raised claims Fiat Chrysler misled investors over the Justice Department’s allegations it used defeat devices to allow diesel-powered vehicles to emit excess emissions
The NHTSA cited “misleading behavior” on the part of FCA during the recall process. As part of the settlement, the automaker agreed to an independent monitor’s audit of its recall performance for a three-year period.
Of course, FCA’s EcoDiesel affair is fresher in people’s minds. The automaker earned federal probes and lawsuits after failing to inform U.S. regulators of the presence of “auxiliary emissions control devices” on its 3.0-liter diesel V6, found in Ram 1500 pickups and Jeep Grand Cherokee SUVs sold for the 2014 to 2016 model years.
Potentially facing billions of dollars in fines, the automaker settled for $800 million in January, placating the Department of Justice and state of California.
FCA’s most recent settlement must be approved by a federal judge before investors can receive their financial pound of flesh.
[Image: Fiat Chrysler Automobiles]
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