Fiat Chrysler to pay $110 million to settle US investor suitPosted On: Apr. 8, 2019 10:17 AM CST
(Reuters) — Italian-American automaker Fiat Chrysler Automobiles NV has agreed to pay $110 million to settle a lawsuit alleging it misled U.S. investors over excess diesel emissions and failed to comply with federal safety regulations, court records show.
The company said in a statement on Monday it “continues to vigorously deny the allegations of wrongdoing made in this lawsuit” and said the settlement is “completely covered by the company’s insurance.”
Investors sued in 2015, charging that the company misled them by asserting that Fiat Chrysler was in compliance with vehicle safety regulations and that the company underreported its reserves for the cost of recalls.
In 2015, Fiat Chrysler settled allegations with the National Highway Traffic Safety Administration that it failed to properly complete 23 recalls affecting more than 11 million vehicles. It paid a $105 million U.S. penalty, conducted additional recalls and agreed to buy back hundreds of thousands of vehicles.
The securities suit also raised claims Fiat Chrysler misled investors over the Justice Department's allegations it used defeat devices to allow diesel-powered vehicles to emit excess emissions.
In January, Fiat Chrysler agreed to an $800 million settlement to resolve claims by the U.S. Justice Department and the state of California that it used illegal software to produce false results on diesel emissions tests.
The lawsuit covers investors who bought Fiat Chrysler stock on a U.S. exchange between Oct. 13, 2014, and May 23, 2017. Lawyers for the investors estimated in a court filing that the settlement is equal to 13.8 percent of maximum damages, calling it “an objectively excellent result when compared to historical statistics in class action settlements.”
The settlement must be approved by a federal judge in New York.