Corporate Law

GM will pay $900M to end US criminal probe over ignition-switch issues

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General Motors has agreed to pay a $900 million fine to resolve a federal criminal probe into the automaker’s reported delay in dealing with ignition-switch issues in some 2.6 million vehicles. The issue has been linked to over 100 deaths and many more injuries. The settlement also involves a three-year deferred prosecution agreement.

The automaker admitted that it failed to disclose to regulators on a timely basis a “lethal safety defect” and “misled consumers about the safety of GM cars with the defect,” the Los Angeles Times (sub. req.) reports.

However, U.S. Transportation Secretary Anthony Foxx put it a bit differently. “General Motors not only failed to disclose this deadly defect, it actively concealed the truth from the National Highway Traffic Safety Administration and the public,” he said, explaining that the $900 million fine is intended to send a message to American companies that “deception and delay are unacceptable, and the price for engaging in such behavior is high.”

In addition to resolving the criminal probe being pursued by the U.S. attorney’s office in Manhattan, GM also announced Thursday that it is paying $575 million to resolve Detroit-based shareholder litigation and has settled many individual suits, the Detroit News reports.

Lead plaintiffs’ lawyer Bob Hilliard confirmed that the automaker has separately settled some 1,385 related civil lawsuits, the Times article says.

“Lives were taken and families were devastated, and there is no way to ever change that sad fact,” Hilliard stated. “Still, this agreement will allow some healing, as GM recognizes, through its payment of financial compensation, the needlessness of this enormous national tragedy.”

The GM settlement apparently does not involve any criminal charges against individuals, earlier Reuters and Wall Street Journal (sub. req.) stories note.

Related coverage: “GM cites ‘pattern of incompetence,’ fires 15 including legal execs, will pay ignition-switch victims” “Documents show GM knew of ignition-switch issue, says plaintiff’s lawyer in leading case” “10 years after fatal accident, conviction is reversed; GM knew its car was to blame but kept quiet” “Feds face tough laws requiring specific intent in possible criminal case over GM ignition issues”

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