Fiat Chrysler (FCAU) $40M Fair Fund

Fiat Chrysler (FCAU) settled $40 million with investors through SEC Fair Fund

On September 27, 2019, the Commission issued an Order Instituting Cease-and-Desist Proceedings according to Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (the “Order”) against FCA US LLC (“FCA US”) and Fiat Chrysler Automobiles N.V. (collectively, the “Respondents”).

In the Order, the Commission found that from at least August 2012 to July 2016, FCA US, an automotive company, fraudulently misled investors about the number of new vehicles that it and its dealers sold each month to customers.

The Commission similarly found that beginning in September 2013, FCA US or its predecessor falsely touted that it continued to increase new vehicle sales every month on a year-over-year basis by reporting what it called a “streak” of uninterrupted sales growth.

To maintain the purported growth streak, FCA US inflated monthly vehicle sales to customers by paying dealers to report fake sales, as well as manipulating other sales data to make vehicle sales appear better than they were. The Commission ordered the Respondents to pay, jointly and severally, a civil money penalty of $40,000,000 to the Commission. The Commission also created the Fair Fund, under Section 308(a) of the Sarbanes-Oxley Act of 2002, so the civil penalty paid can be distributed to harmed investors. The Fair Fund includes the $40,000,000 paid by the Respondents.