General Motors accepted to pay $1 million to solve a U.S. Securities and Exchange Commission accounting case related to a malfunctioning ignition switch connected to 124 deaths and 275 injuries, the regulator stated on Wednesday.
The deal would fix charges that accounting control failures at the car manufacturer avoided the automaker from effectively evaluating the possible monetary impact of the malfunctioning ignition switch, which caused car recalls starting in 2014, the SEC stated.
The largest U.S. car manufacturer stated it granted an administrative SEC order, without confessing or rejecting any misbehavior. “The SEC settlement does not bring into question any of General Motor’s existing or previous monetary declarations or its disclosures,” automaker stated.
The SEC stated GM’s internal examination including the faulty ignition switch was not given the attention of its accountants till November 2013 although other GM workers comprehended in the spring of 2012 that a safety concern was at hand.
“Internal accounting controls at General Motors failed to think about appropriate accounting guidance when it pertained to thinking about disclosure of prospective automobile recalls,” stated Andrew M. Calamari, director of the SEC’s New York Regional Office.
Car manufacturers should examine the possibility of “whether the potential recall will occur, and provide an estimate of the associated loss or range of loss or otherwise provide a statement that such an estimate cannot be made,” the SEC stated.
General Motors sustained ignition switch-related expenses of over $2 billion and reserved billions more for other recalls in 2014 and 2015.
