Sales figures are one of the most important metrics in the automotive industry, but Fiat Chrysler Automobiles has been slapped with a $40 (£32 / €36) million fine for inflating their numbers.
According to the Securities and Exchange Commission, the company misled investors about the number of new vehicles sold in the United States.
The alleged cheating occurred between 2012 and 2016, and the SEC says “FCA US issued monthly press releases falsely reporting new vehicle sales and falsely touting a ‘streak’ of uninterrupted monthly year-over-year sales growth, when in fact, the growth streak had been broken in September 2013.”
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In order to juice the numbers, the SEC says the company paid dealers to report fake vehicle sales and maintain a “database of actual but unreported sales” which was called a “cookie jar.” When the automaker was in danger of failing to hit sales targets or losing their growth streak, “FCA US dipped into the ‘cookie jar’ and reported old sales as if they had just occurred.”
Needless to say, this is highly deceptive and would make it virtually impossible for outside observers to know what the company’s sales actually were.
Following a lengthy investigation, the SEC found the company violated anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, as well as record keeping and reporting provisions of the Exchange Act. FCA and FCA US decided to settle the issue, without admitting or denying guilt, by paying the $40 (£32 / €36) million fine.
FCA didn’t have much to say about the settlement, but the company released a statement claiming they fully cooperated with the investigation. The automaker added they have “reviewed and refined its policies and procedures and is committed to maintaining strong controls regarding its sales reporting.”
While FCA downplayed the issue, the SEC’s Antonia Chion said “This case underscores the need for companies to truthfully disclose their key performance indicators.”
