This is the latest among several fines against the automaker for its handling of the massive recall.
General Motors will pay a $1-million civil settlement to the United States Securities and Exchange Commission over the automaker’s accounting practices surrounding its 2014 ignition switch recall. According to the government’s market regulator, the firm’s system didn’t let accountants begin determining the cost of these repairs in a timely manner.
GM’s accountants didn’t find out about the defective ignition switches until November 2013, despite other people in the company knowing about the issue as early as spring 2012, according to the SEC's investigation. By not knowing about the problem for several months, the firm’s financial experts weren’t able to calculate the losses from a recall during that time. This is a violation of the Securities Exchange Act “by not devising and maintaining a sufficient system of internal accounting controls,” according to the SEC.
While GM consents to pay the government, the automaker doesn’t have to admit any wrongdoing. “The SEC settlement does not call into question any of GM’s current or prior financial statements or its disclosures. Also, no material weakness or significant deficiency was found by the SEC,” the company said in the statement.
Over the course of 2014, General Motors issued multiple recalls for faulty ignition switches that when jostled could shut off the engine, including deactivating the air bags. The scale of the safety campaign eventually totaled over 11 million vehicles in the U.S. The company’s compensation fund for injured owners identified 124 deaths from this dangerous problem.
In addition to this $1-million settlement, GM has also faced financial penalties from other government agencies in the U.S. For example, the National Highway Traffic Safety Administration fined the firm $35 million in May 2014, and the Department of Justice slapped the automaker with a $900-million punishment. The company’s own victim compensation fund paid out $594.5 million, too.
Source: General Motors, Securities and Exchange Commission via Automotive News