General Motors has agreed to a $5.75 million settlement over allegations that the automaker made false statements to investors and the California Public Employees’ Retirement System, or CalPERS, regarding the faulty ignition switch recall issued in 2014.
According to a recent report from Reuters, California Attorney General Xavier Becerra said that GM hid issues related to the ignition switch recall, failing to build reserves for expected losses and artificially inflating the automaker’s stock price. Bercerra concludes that CalPERS lost millions of dollars as a result of GM’s actions.
“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,” Bercerra said.
Meanwhile, General Motors said that it was “pleased to have cooperated with the state of California to resolve this matter.”
As GM Authority covered last year, General Motors agreed to a $120 million settlement for owners claiming that defective GM ignition switches resulted in lost vehicle value. In 2017, GM agreed to pay $120 million over claims made in 49 U.S. states and the District of Columbia regarding the faulty ignition switches. GM also previously paid roughly $2.6 billion in fines and penalties related to the faulty ignition switches, with a $900 million settlement in a U.S. Justice Department criminal investigation, and $1 million for a U.S. Securities and Exchange Commission accounting case.
The GM faulty ignition recall was first issued in February of 2014, with an estimated 30 million vehicles worldwide eventually recalled, including Buick, Cadillac, Chevrolet, GMC, Oldsmobile, Pontiac, and Saturn models.
The issue is in the design of the ignition switch, which could potentially fall to the “Off” position while the vehicle is in motion, shutting off the engine and disabling the airbags. The defect is attributed to 124 deaths and 275 injuries.