Ghosts From the Past Continue to Haunt Fiat Chrysler
Hauntings normally don’t cost the homeowner $40 million, but that’s what Fiat Chrysler faces after over-reporting monthly vehicle sales for a period of several years. Late last week, the U.S. Securities and Exchange Commission hit FCA with a fine for its now-corrected sales reporting practices, claiming the automaker misled investors.
FCA’s sales reporting trickery is also behind a lawsuit filed against the company by one of its top executives.
In an act seldom seen in the industry, Reid Bigland, FCA’s head of U.S. sales and head of the lucrative Ram brand, filed a whistleblower lawsuit against his employer back in June. Bigland claims FCA slashed 90 percent of his pay, withholding last year’s annual bonus and stock payout in preparation for a fine levelled by the SEC. Bigland claims the move cost him $1.8 million.
The sales reporting practices, which Bigland claims he’s being wrongfully held accountable for, began years before his arrival at FCA. The exec came aboard as sales chief in 2011; the reporting practices kicked off in 1989, he claims.
From the SEC:
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. FCA US and Fiat Chrysler Automobiles included the press releases in their SEC filings. New vehicle sales and the growth streak were key performance indicators that illustrated the company’s competitive position and demand for its vehicles. The SEC’s order finds that 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.
For violating the anti-fraud and reporting provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, FCA now faces a civil penalty of $40 million.
“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, the SEC enforcement division’s associate director, in a statement. “This case underscores the need for companies to truthfully disclose their key performance indicators.”
The sales snafu wasn’t the only thing to bite FCA last week. Another ghost came to visit in the form of the company’s EcoDiesel scandal, with Emanuele Palma, FCA’s senior manager of diesel driveability and emissions, now facing charges of conspiracy and fraud for his role in the creation of emissions-rigged diesel V6 engines.
[Image: Fiat Chrysler Automobiles]
Join the conversation
Latest Car ReviewsRead more
Latest Product ReviewsRead more
- FreedMike Ford "Powershudder" DCT? Hard pass...with extreme prejudice. The only people who liked these were the class-action lawyers. With a manual, it'd be a different story.
- Cprescott I blow on a pinwheel....
- Jkross22 Looks good in and out, but pricing is nonsensical. Anyone spending in the low to upper 40s and wanting something like this would be better off in a Stelvio and anyone wanting a small, fun SUV would be better off in a Q3, X1 or even X3. All hover around that price.Dodge is getting high off its own supply.
- Parkave231 If I were employed at Grand River, I'd be very worried right now...
- ScarecrowRepair I can grok everything but 20 TV monitors. What earthly purpose do they serve? If the entire skin were screens, it could change like a chameleon. But they are just square blobs scattered all over. The rear ones can send messages to tailgators. The others?At least the two fake NOS bottles are car related. If it had cattle horns up front, at least that would relate to historical car bling.Makes me wonder how many other mods are just as useless, and how well any of them are done.
Y U NO LIKE COOKIES?