Feds probe Fiat Chrysler Automobiles

The company says in a statement that it¿s cooperating with an investigation by the Securities and Exchange Commission and that it has received similar inquiries from the Justice Department.

Shawn Morgan, a spokeswoman for Auburn Hills, Michigan- based Fiat Chrysler, didn’t immediately respond to a telephone and e-mail request for comment.

Sergio Marchionne, Fiat Chrysler’s CEO, earlier in the year said the manufacturer was interested in outsourcing manufacturing for the Dodge Dart and Chrysler 200, but at this stage nothing has been confirmed.

A Chicago-area dealer alleges the company inflated its USA auto sales by paying dealers to report selling more vehicles than they actually did.

“In its annual and quarterly financial statements, FCA records revenues based on shipments to dealers and customers and not on reported vehicle unit sales to end customers”, Fiat Chrysler said in the statement.

Bloomberg reported that the company is facing U.S. Department of Justice fraud investigation that is looking carefully at whether the company has violated U.S. securities laws.

The Napleton lawsuit alleges that a competing dealership reported 85 false new vehicle sales and got tens of thousands of dollars in return.

Fiat Chrysler shares in the US fell more than 5% in intraday trading after the initial report of the probe.

The company said it sold 2.2 million vehicles a year ago.

The dealers that filed the lawsuit – Napleton’s Arlington Heights Chrysler Dodge Jeep Ram in Arlington Heights, Ill., and Napleton’s Northlake Chrysler Dodge Jeep Ram in Lake Park, Fla., – are part of the Napleton Automotive Group, one of the largest Fiat Chrysler dealer groups in the U.S.

An Illinois court is considering a motion by Fiat Chrysler to have the lawsuit dismissed.

To back up their claim, the plaintiffs refer to the US$105 million penalty imposed in July 2015 by the U.S. National Highway Traffic Safety Administration related to the company’s handling of recalls for 23 issues.