BMW will pay a fine of $ 18 million to settle allegations that it has inflated its monthly sales figures in the United States for five consecutive years.
The Securities and Exchange Commission said Thursday that the German luxury automaker maintains a reserve of unreported sales it is relying on to meet monthly targets from 2015 to 2019.
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BMW disclosed the misleading information while raising around $ 18 billion in several corporate bond deals, the agency said.
“Companies that enter US markets to raise capital have an obligation to provide accurate information to investors,” Stephanie Avakian, director of the SEC’s law enforcement division, said in a statement.
These actions have helped BMW maintain a leading retail position among other luxury automakers, the agency said.
BMW of North America also misadjusted its sales reporting schedule in 2015 and 2017 to meet internal targets or bank excess sales to use in the coming months, according to the SEC. The reserve of undeclared sales has been internally referred to as “the bank,” the agency said. BMW also paid dealerships to designate vehicles as demonstrators or lenders so that they could be counted as sales, the SEC said.
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The SEC said BMW had cooperated with its investigation, even as the coronavirus outbreak forced it to close offices and force workers to stay at home. Cooperation was taken into account when imposing the sanction, the agency said.
BMW AG, BMW North America and BMW US Capital have neither admitted nor denied the agency’s findings. All three agreed to pay the fine and stop violating securities laws.
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In a statement, BMW said much of the driving took place over three years ago and was due to negligence. “There is no allegation or conclusion in order that a BMW entity has engaged in willful misconduct,” the company said. “The BMW Group attaches great importance to the accuracy of its sales figures and will continue to focus on comprehensive and consistent sales reports. ”
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BMW is the second automaker in recent years to face penalties for inflating sales figures. Last year, Fiat Chrysler agreed to pay $ 40 million to settle an SEC complaint alleging the company misled investors by overestimating its monthly figures over a five-year period. The company inflated sales by paying dealerships to report fake numbers from 2012 to 2016, the SEC alleged in a complaint.