FiatChrysler is being investigated by the Securities and Exchange Commission (SEC) over its financial reporting, claims BBC News post. In addition, Department of Justice (DoJ) is taking a look into carmaker’s quarterly and annual reports.
According to the company, revenues are based on shipments to the car dealers instead of actual sales to buyers. And this has raised concerns of the Federal regulators in the United States.
In 2015, FiatChrysler had sold more than two million cars, and last June the company reported the best sales in a decade. But, some of its sales practices have begun to be questioned early this year after one of the dealers filed a lawsuit accusing the company of racketeering and fraud.
The dealer claims that this Italian-American automaker encouraged them to report inflated sales by offering the manager $20,000 to report some fake car transactions. FiatChrysler pledged to defend itself from this lawsuit, while cooperating with the regulators in solving the apparent accounting discrepancies.
The company’s stock currently trades at around $6.50 per share, closer to its 52-week low. The market cap stands at only $8.5 billion. The reported net income in 2015 was $410 million on sales of $120 billion.
In the past, Chrysler had merged with Daimler, but that didn’t work out. Now, it has combined forces with Fiat, making it an important player in the automotive industry, but without significant results for its shareholders.