GM Pays $1 Million To Settle SEC Claims Over Ignition Switch Issues
Car makers should do the right thing when there are problems with vehicles, but this does not always happen. A lack of willingness on the part of car manufacturers to step up to the plate and solve problems is one big reason why consumer protection laws are so important.
Motorists whose cars have issues need to understand the consumer protection laws that could be applicable in their situation. Knowledgeable lemon law attorneys can help to consumers resolve their vehicle problems.
Consumers also need to be aware they cannot always trust car makers to alert them to problems or to make appropriate fixes. For example, General Motors knew their ignition switches had problems but covered up the issue for a long time, even as people were killed. GM has faced many legal consequences as a result of its handling of ignition problems, and CNBC now reports that GM recently paid $1 million to the Securities and Exchange Commission (SEC) to settle an accounting case.
A Closer Look at the Issues
According to CNBC, General Motors failed to alert its accountants of defective ignition switches when the problem was discovered. GM was aware of problems with the ignition switch in 2012, but did not alert its accountants of the problem until 2013.
At least 124 deaths and 275 injuries were ultimately caused by ignition switch problems, and GM didn't take action to recall cars with the faulty ignition until 2014. Had GM alerted accountants to the problem earlier, the SEC indicates that the accountants would have helped he company to properly assess the financial impact of the ignition problems.
Car makers are required to consider the possibility of a recall and must provide estimates of associated costs and losses, or must provide a statement that no estimate can be created. Since GM didn't alert accountants to the problem, a proper and accurate assessment was not made and thus the potential financial loss was not disclosed. This prompted the SEC to take action due to GM's failure to follow required accounting practices which in turn resulted in GM negotiating a settlement and paying $1 million in fines.
Hopefully, penalties will deter vehicle manufacturers from ignoring problems rather than proactively acting to fix them. Unfortunately, even with the fines, many car makers will likely continue to cover up vehicle problems rather than take costly action to fix them.
It is up to consumers to do everything they can to try to protect themselves from car dealers who may do the wrong thing. Owners of defective cars should explore their legal options. To find out more about the consumer protection laws that could apply to your situation, contact the San Diego lemon attorneys at The Bickel Law Firm, Inc. for help as soon as possible.