GM Misled Investors During Ignition Recall
Shareholders in General Motors Co. have accused the company of inflating the stock’s value and misrepresenting issues involving vehicle ignition switch defects.
Information on the Misrepresentation
According to Automotive News, the company’s CEO Mary Barra claimed GM had internal control over the finances the day before the first recall was announced; however, up to 2.59 million vehicles were recalled due to an ignition switch used in the vehicles have a propensity to slipping out of the “run” position.
Investors also claim that GM cheated stockholders, stating “GM’s internal controls continued to suffer from severe and systemic problems which resulted in GM’s failure to accurately account for and disclose the ignition switch defects and associated liabilities, costs, and contingencies in its financial statements.”
In 2001, before mass production, GM was apparently aware of potential ignition defects. In 2005, engineers of figured out that the vehicles’ ignition switches failed, but these concerns were not reported to National Highway Traffic Safety Administration (NHTSA).
Instead, GM decided to fix the vehicles by sending out “Technical Service Bulletins” to dealers, and not issue a recall.
GM investors have lost billions of dollars in market value because of the belated recall of the unsafe vehicles. Moreover, many deaths could have been prevented if GM had reported the defect to the (NHTSA).
A shareholder lawsuit was filed against GM and will represent investors of GM stock from Nov 17, 2010 to July 24, 2014.
List of GM Vehicles Included in Ignition-Related Recalls
The following vehicles have been recalled for ignition-related defects:
- 2005-2010 Chevrolet Cobalt
- 2007-2010 Pontiac G5
- 2003-2007 Saturn Ion
- 2006-2011 Chevrolet HHR
- 2006-2010 Pontiac Solstice
- 2007-2010 Saturn Sky
- 2005-2009 Buick Lacrosse
- 2000-2014 Chevrolet Impala
- 2000-2005 Cadillac Deville
- 2004-2011 Cadillac DTS
- 2006-2011 Buick Lucerne
- 2004-2005 Buick Regal LS & GS
- 2000-2008 Chevy Monte Carlo
- 1997-2005 Chevy Malibu
- 1998-2002 Oldsmobile Intrique
- 1999-2004 Oldsmobile Alero
- 2004-2008 Pontiac Grand Prix
- 2011-2012 Chevrolet Silverado HD
- 2011-2012 Chevrolet Silverado LD
- 2011-2012 Chevrolet Suburban
- 2011-2012 Chevrolet Tahoe
- 2011-2012 Chevrolet Avalanche
- 2011-2012 GMC Sierra LD
- 2011-2012 GMC Sierra HD
- 2011-2012 GMC Yukon
- 2011-2012 GMC Yukon XL
- 2011-2012 Cadillac Escalade
AUTOMOBILE ACCIDENT RESULT
$1.8 MillionExpenses: $20,000.00 | Attorneys Fees: $765,000.00 | Net to Client: $1 Million
AUTOMOBILE ACCIDENT RESULTS
$2 MillionExpenses: $78,475.96 | Attorneys Fees: $850,087.96 | Net to Client: $1,071,436.00
AUTOMOBILE ACCIDENT RESULT
$2.3 MillionExpenses: $200,000.00 | Attorneys Fees: $900,000.00 | Net to Client: $1.2 Million