Fiat Chrysler to pay $110M to investors who said they were deceived over diesel
Automaker pools resources with Tesla to meet EU emissions criteria
Italian-American automaker Fiat Chrysler Automobiles NV has agreed to pay $110 million US 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 under-reported 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.
$800M settlement for using illegal software
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 per cent of maximum damages, calling it "an objectively excellent result when compared to historical statistics in class action settlements."
In the EU, Fiat Chrysler has struck a deal with Tesla to help it meet new emissions criteria that take effect next year.
It will pay electric carmaker Tesla Inc hundreds of millions of euros to allow Tesla vehicles to be counted in its fleet to avoid fines for excess emissions of greenhouse gases.
The EU rules allow companies to pool all their operations together, or strike partnerships with other automakers to reduce their average emissions limit to 95 g per kilometre.
Tesla has made over $1 billion in the last three years by selling emissions credits in the United States, according to its annual report to the U.S. Securities and Exchange Commission.