SEC Investigating BMW Over Sales Practices--Update
December 23 2019 - 7:05PM
Dow Jones News
By William Boston in Berlin and Mike Colias in Detroit
BERLIN -- The Securities and Exchange Commission has opened an
investigation into German luxury car maker BMW AG, a company
spokesman said on Monday.
The SEC is looking into whether the Munich-based auto maker
engaged in the practice known as sales punching in the U.S.,
according to people familiar with the matter.
Sale punching occurs when a company boosts sales figures by
having dealers register cars as sold when the vehicles actually are
still standing on car lots.
"We have been contacted by the SEC and will cooperate fully with
their investigation," the spokesman told The Wall Street Journal,
declining to elaborate further on the investigation.
The SEC couldn't immediately be reached for comment.
The probe comes as the U.S. officials continue to pursue
companies suspected of falsifying data and misleading
investors.
Fiat Chrysler Automobiles N.V. in September agreed to pay $40
million to settle claims by the SEC that the company had for years
paid dealers to report exaggerated sales numbers. The company said
at the time it had reviewed and refined its sales reporting
procedures and was committed to maintaining strong controls.
The company also revised monthly sales results going back
several years, nullifying a 75-month streak of sales increases.
Under those revised methods, the streak ended in September 2013,
three years earlier than previously stated.
This year, Fiat Chrysler joined General Motors Co. and Ford
Motor Co. in ending the practice of reporting monthly U.S. sales
numbers. The Detroit companies now report their U.S. sales
quarterly, while most other major car companies still disclose
results each month.
The SEC investigation also follows 2015 indictments against
Volkswagen AG on charges of defrauding U.S. consumers and the U.S.
government and violating the Clean Air Act by rigging
diesel-powered vehicles to cheat emissions test. That case was
brought by the Justice Department.
Volkswagen pleaded guilty to the charges in 2016 and has faced
more than $30 billion in fines, penalties, and compensation
fees.
In addition, BMW faces litigation by European authorities on
allegations of colluding with rivals to manipulate prices on
technology to control emissions. BMW, which has vowed to fight the
case, in April took a $1.1 billion charge against earnings as a
provision for potential fines from the case.
BMW sold 322,862 vehicles in the U.S. in the first nine months
of the year, an increase of 1.7% from a year ago, including its
namesake BMW brands and its Mini brand.
BMW also has been under pressure in the U.S. because of the
Trump administration's trade war with China, which has hit BMW's
SUV exports from its Spartanburg, S.C., factory. BMW has responded
by shifting some production from the U.S. to China.
Nora Naughton in Detroit contributed to this article.
Write to William Boston at william.boston@wsj.com and Mike
Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
December 23, 2019 18:50 ET (23:50 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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