General Motors agreed to a $5.75 million settlement to resolve allegations it made misleading statements to California’s largest pension system and other investors concerning its deadly ignition switch recalls.
California Attorney General Xavier Becerra said the largest U.S. automaker concealed issues from investors associated with faulty ignition switches linked to 124 deaths and 275 injuries.
The automaker failed to build reserves for losses it knew were coming, Becerra said, which artificially inflated the automakers’ stock price and caused the California Public Employees’ Retirement System or CalPERS to lose millions of dollars.
GM paid about $2.6 billion before in total penalties and fines tied to the ignition switch issue, including $900 million to settle a U.S. Justice Department criminal investigation and $1 million to resolve a U.S. Securities and Exchange Commission accounting case.
GM said it was pleased to have worked it out with the state of California to resolve this matter.
“General Motors cheated California twice – first by concealing a fatal flaw in its vehicles, then by concealing the facts about the flaw in its financial disclosures, which affected the retirement investments of public servants across California,” Becerra said.
GM in 2017 accepted to pay $120 million to resolve claims from 49 U.S. states and the District of Columbia concerning the ignition switches.
The faulty ignition switches that could cause engines to stall and prevent airbags from deploying in accidents prompted a recall that started in February 2014 of 2.6 million vehicles.
The states said the automaker knew as early as 2004 that the ignition switch posed a safety defect as it could cause airbag non-deployment. It was alleged that company officials decided it was not a safety concern and they have delayed recalls.
Last year GM agreed to a $120 million settlement with owners who said defective ignition switches led to the reduction of the value of their vehicles.
