BMW just became the latest automaker fined – $18 million – by federal regulators for disclosing “misleading” information about its U.S. sales results.
The company and two U.S. subsidiaries reached an agreement U.S. Securities and Exchange Commission to pay the penalty. The SEC accused the German automaker of inflating its U.S. sales results while it also raised about $18 billion from investors in corporate bond offerings.
The “inflated” sales figures helped to narrow the difference between the actual results and BMW’s internal forecasts, and “publicly maintain a leading retail sales position relative to other premium automotive companies,” Reuters reported.
Fiat Chrysler paid a $40 million fine last fall for falsifying sales reports for about five years.
From 2012 through 2016, Fiat Chrysler’s U.S. unit falsely reported its new vehicle sales results each month, bulking up the results through a variety of fraudulent methods to make it look like the company had a 75-month streak of year-over-year monthly sales increases.
The company’s run of increased sales ended in 2013; however, it continued to maintain it was on the impressive sales run until 2016. In July 2016, it revised five years of monthly sales reports. The move was done to reflect a new reporting method.
In the case of BMW, according to Reuters, BMW of North America “maintained a reserve of unreported retail vehicle sales — referred to internally as the ‘bank’ — that it used to meet internal monthly sales targets without regard to when the underlying sales occurred.”
The SEC probe started in late 2019, BMW said in a statement, also noting there is “no allegation or finding in the Order that any BMW entity engaged in intentional misconduct.” The automaker added it “attaches great importance to the correctness of its sales figures and will continue to focus on thorough and consistent sales reporting.”
In addition to the “pool,” the agency noted BMW paid dealers to participate in the scheme, naming some vehicles as loaner vehicles so the company could count them as “sold” vehicles.
“BMW misled investors about its U.S. retail sales performance and customer demand for BMW vehicles in the U.S. market while raising capital in the U.S.,” said Stephanie Avakian, the SEC director of the division of enforcement.