Fiat Chrysler has agreed to pay a hefty $40 million settlement with the Securities and Exchange Commission (SEC) over its alleged years-long practice of bloating its own sales numbers to investors. The world's eighth-largest automaker did not admit or deny the accusations made by the SEC against it during the settlement.
According to a statement released by the SEC on Friday, its investigation into the company's practice revealed that Fiat Chrysler had been intentionally bloating its sales figures from 2012 to 2016. The company allegedly used a database of unreported sales it called internally as the "cookie jar."
Company executives allegedly lied to investors and claimed that the company was experiencing a prolonged period of sales growth without any real evidence to back it up. Fiat Chrysler's false claims of its consecutive sales growth were reportedly nothing more than its own fabricated figures.
The SEC mentioned in its statement that it had found Fiat Chrysler guilty of falsely inflating its new vehicle sales by paying its own dealers to report fake vehicle sales. The agency also claims that Fiat Chrysler kept its own internal record of its actual sales numbers, which the company hid from the public and its investors.
During months when the company was unable to reach its targets, Fiat Chrysler allegedly dipped into its "cookie jar" using older sales figures pretending that it was its current month's sales. The SEC revealed that on September 2013, Fiat Chrysler reported an additional 7,000 units were sold, which the agency found to have been completely bogus.
This was apparently the start of the company's apparent streak of improved monthly sales, which continued on until May 2016. During the end of the streak, Fiat Chrysler bloated its sales figures to as much as 12,000 units. Fiat Chrysler used its claimed sales growth streak to convince investors of its continued success and its potential growth in the coming years.
The SEC also revealed how Fiat Chrysler used its 75-month long sales growth in its propaganda. The company claimed that the streak was a "stunning record," describing it as an "incredible" feat by the company.
Fiat Chrysler issued a limited response to the accusations and the settlement, only mentioning that it has reviewed and refined its own policies to adhere to the agency's recommendations. The company also stated that it is committed to maintaining strong oversight in its own sales reporting. The exact details of the settlement, apart from the fine amount, were not publicly disclosed. Fiat saw its shared dip slightly following the announcement of the $40 million settlement.
