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Fiat Chrysler Settles SEC Charges Of Misleading Investors Over Emissions Compliance For $9.5M

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Fiat Chrysler Settles SEC Charges Of Misleading Investors Over Emissions Compliance For $9.5M

Fiat Chrysler Automobiles NV (NYSE: FCAU) has agreed to pay a civil penalty of $9.5 million to settle U.S. Securities and Exchange Commission allegations of violating federal securities law by sharing misleading information with investors and stakeholders.

What Happened: According to the SEC, in Feb 2016, the automaker disclosed that the emission control systems in its vehicles were compliant with the environmental regulations on emissions. The company made the claim in both its annual report and in a press release.

Concerns were also raised by the U.S. Environmental Protection Agency (EPA) and California Air Resource Board (CARB) at the time. The regulators found that the internal audit of its emission control systems was performed in a limited scope and appropriate disclosures were not made.

Even though the company has not admitted or denied the SEC’s findings, Fiat has agreed to pay the penalties for violations.

According to Reuters, in January 2019, Fiat agreed to pay $800 million to settle claims made by the CARB. Reportedly, the company used “illegal software” to produce controlled diesel-emissions test results.

Why Does It Matter: According to the Detroit News, diesel vehicles between 2014-2016 were flagged, which included 104,000 Jeep Grand Cherokee SUVs and Dodge Ram 1500 Pickups.

Over the years, Fiat has been slapped with penalties and fine for multiple reasons.

The automaker, in September last year, agreed to pay a $40 million fine over charges related to falsely reporting monthly vehicle sales between 2012 and 2016. A month later, Fiat said it faced an $80 million penalty over non-compliance with fuel economy standards and greenhouse gas emission standards, Reuters reported.

Price Action: FCAU stock gained 3.38% on Monday to close at $12.37 per share.

Photo courtesy: Fiat Chrysler Automobiles N.V.

 

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