Fiat Chrysler to pay $9.5M in SEC probe related to diesel emissions cheating scandal
Fiat Chrysler Automobiles is set to pay a $9.5 million civil penalty related to allegations that it misled investors about its diesel emissions scandal, according to the U.S. Securities and Exchange Commission.
The settlement, announced Monday, is just one piece in FCA’s diesel case, which, like Volkswagen’s Dieselgate, focused on claims the company installed so-called defeat devices to cheat emissions testing.
Defeat devices would let a vehicle perform differently during testing than on the road, leading to excessive pollution. In addition to FCA and VW, numerous auto companies and the auto supplier Bosch have been accused of or agreed to settle claims of diesel emissions cheating.
The FCA case involved approximately 100,000 2014-16 Eco-diesel Ram 1500 pickups and Jeep Grand Cherokees. An earlier estimate put the expected cost to FCA for a class-action settlement, various penalties and other costs at more than $790 million. FCA has acknowledged that it’s also been in talks with the Justice Department’s Criminal Division about its investigation, and an FCA manager, Emanuele Palma, has been indicted.
FCA was asked for comment about the SEC settlement. An SEC news release said the company did not admit or deny the commission’s findings, but that FCA agreed to “cease and desist” from violating reporting provisions of U.S. securities law.
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The SEC said it found that in February 2016 FCA, in both a news release and an annual report, had asserted that an internal audit determined that its vehicles complied with environmental regulations related to emissions. However, the company “did not sufficiently disclose the limited scope of its internal audit, which focused only on finding a specific type of defeat device,” the release said.
“This case demonstrates the importance of public companies providing accurate and complete information to investors,” Joel Levin, regional director of the SEC’s Chicago Regional Office, said in the news release. “At a time of heightened scrutiny of automakers’ regulatory compliance, FCA provided misleading assurances to investors by not disclosing the limitations of its internal audit.”
FCA previously denied any intentional wrongdoing in the cheating scandal, but federal authorities have said they believe the automaker actively deceived regulators and the public for years.
Contact Eric D. Lawrence: elawrence@freepress.com. Follow him on Twitter: @_ericdlawrence. Become a subscriber.
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