Fiat Chrysler Sales Reporting Target of FBI, SEC Investigations

By Paul Ausick Updated Jan 13, 5:36AM EST · Published Jul 18, 1:35PM EDT

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Fiat Chrysler Sales Reporting Target of FBI, SEC Investigations — © Wikimedia Commons

Details are scarce, but Automotive News reported early Monday afternoon that FBI and U.S. Securities and Exchange Commission (SEC) investigators have visited U.S. employees of Fiat Chrysler Automobiles N.V. (NYSE: FCAU) in their offices and homes during the month of July. Sources said that “raids or visits also were conducted in Orlando, Dallas, and California, … and included current and former FCA employees.”

Neither the FBI nor the SEC would comment on the report and Fiat Chrysler said it would have a statement later Monday.

Bloomberg reported that the company is facing U.S. Department of Justice fraud investigation that is looking carefully at whether the company has violated U.S. securities laws.

The investigation may be tied to a racketeering suit filed against Fiat Chrysler earlier this year by a Chicago-area auto dealer that charged the company with inflating monthly sales figures by paying dealers to report phony sales and then backing out the sales before warranty periods began running.

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At the time Fiat Chrysler said that it was “confident in the integrity of its business processes and dealer arrangements and intends to defend this action vigorously.”

Automotive News points out that the automaker has included the following disclaimer on its monthly sales reports since April:

FCA US reported vehicle sales represent sales of its vehicles to retail and fleet customers, as well as limited deliveries of vehicles to its officers, directors, employees and retirees. 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.

Does that clear things up? What this seems to indicate is that if there are any errors in the data, it’s either the fault of the “new vehicle delivery reporting system” or the devil.

The report has not had more than a temporary negative effect on Fiat Chrysler’s share price. The stock dropped to an intraday low of $6.55 and traded at $6.78 mid-afternoon on Monday. The stock’s 52-week range is $5.45 to $10.93.

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.