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Report: U.S. Government Considering Criminal Charges Against GM

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According to a new report by Bloomberg, the U.S. government is in the process of weighing the evidence against General Motors Company (NYSE: GM) to determine if there are grounds for criminal charges relating to a faulty ignition switch that has been linked to more than 100 deaths.

Citing “a person familiar with the investigation,” the Bloomberg report indicates that Manhattan U.S. Attorney Preet Bharara has been reviewing evidence in coordination with the Federal Bureau of Investigation to determine if any GM employees broke the law.

Faulty Switch

GM’s faulty ignition switches can become jammed in the “accessory” position, disabling power steering and airbags.

Related Link: General Motors Won't Meet 2017 Electric Vehicle Target

GM has already recalled of 2.59 million cars containing the faulty switches, and the company has taken $550 million in charges for payouts related to victim compensation.

U.S. Options

If any evidence is deemed sufficient, the U.S. government can decide to bring criminal charges against the company, bring charges against one or more company employees or agree to a deferred prosecution with GM under which the company would pay a fine and agree to operational changes that would help protect consumers in the future.

According to the source, the government is still in the process of deciding its course of action, and a decision will likely not be reached soon.

What Could GM Expect From A Deferred Prosecution?

Bharara is no stranger to going after big names in the auto business. His office previously reached a deferred prosecution agreement with Toyota Motor Corp (NYSE: TM) over the company’s internal attempts to hide safety defects that caused uncontrolled acceleration in the company’s vehicles.

Toyota agreed to pay $1.2 billion in fines, the largest criminal penalty ever imposed on a car company by the U.S. government.

Posted-In: News Rumors Legal Events


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