Fiat Chrysler Under SEC, FBI Investigation Over Sales Practices

Fiat Chrysler Under SEC, FBI Investigation Over Sales Practices

Fiat Chrysler Automobiles (FCA) is facing a probe by both the FBI and Securities and Exchange Commission (SEC), looking into its sales reporting practices. 

On July 11, FCA field staff were visited in their homes and offices, while FCA headquarters was also visited by federal staff attorneys. All FCA employees were told not to talk to investigators without a lawyer present. FCA operations in Orlando, Dallas and California were also visited on the same day as part of the probe.

FCA says that it will comply fully with the investigation, though exactly what is being looked into is still unknown. It seems to be linked to the case of the Napleton dealership group in Illinois that accused FCA of paying dealers to improperly inflate sales in a federal lawsuit earlier this year. At the time, FCA released a statement calling the allegations “baseless,” but the company also began adding a long disclaimer onto its sales reporting following the allegations.

SEE ALSO: Feds Fine FCA $70M Over Safety Reporting Practices

Part of the disclaimer reads: “Sales from dealers to customers are reported to FCA US by dealers as sales are made on an ongoing basis through a new vehicle delivery reporting system that then compiles the reported data as of the end of each month. Sales through dealers do not necessarily correspond to reported revenues, which are based on the sale and delivery of vehicles to the dealers. In certain limited circumstances where sales are made directly by FCA US, such sales are reported through its management reporting system.”

In the Napleton lawsuit, the dealer claims that FCA would pay dealers to report extra sales on the last day of the month then back out of the sales the following day before the factory warranty would kick in.

Both the FBI and SEC declined to comment on the story.

[Source: Automotive News]

Discuss this story at our Chrysler Forum

  • craigcole

    This sounds like trouble. I wonder how inaccurate FCA’s sales reports have been?