BMW to Pay $18 Million for Inflating Monthly Sales Numbers
BMW is in hot water for its sales reporting tactics. The Security and Exchange Commission entered into a settlement with the automaker. BMW will pay $18 million for inflating sales numbers in the U.S. from 2015 to 2019.
According to a release sent out by the SEC this week, BMW kept a reserve of unreported retail sales that it used to reach company targets, ignoring when the sales actually happened. The agency also says BMW paid dealers to erroneously label vehicles as loaners or demonstrators so they could count them as sold. BMW reported the misleading sales information while going on to raise $18 billion from investors in corporate bond offerings.
“Companies accessing U.S. markets to raise capital have an obligation to provide accurate information to investors,” said Stephanie Avakian, Director of the Division of Enforcement. “Through its repeated disclosure failures, BMW misled investors about its U.S. retail sales performance and customer demand for BMW vehicles in the U.S. market while raising capital in the U.S.”
BMW cooperated with the investigation but would not admit or deny the SEC’s findings, while agreeing to the settlement. BMW AG, BMW of North America, and BMW US Capital agreed to pay the joint penalty and to refrain from committing the same violations in the future.
Of course, BMW isn’t the only carmaker to get caught fudging sales numbers. Last year, FCA agreed to a fine of $40 million for inflating sales figures from 2012 to 2016. A few decades ago, Mitsubishi inflated monthly figures by filing false retail delivery records, reported Automotive News. In a practice called “burning an RDR,” vehicles on dealer lots would be erroneously reported as sold. Around the same time, Cadillac apologized to Lincoln for buffing up its sales numbers to maintain its lead in the luxury game, as the Los Angeles Times reported.
Source: SEC via the Associated Press
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