GM ignition switch recall: SEC opens investigation
Via Michigan Live
DETROIT — U.S. securities regulators are looking into General Motors' delayed recall of more than 2 million cars with a deadly ignition switch problem.
GM disclosed in a quarterly report Thursday that the Securities and Exchange Commission has made inquiries about the recall. It also confirmed for the first time that the U.S. Attorney's office in New York and an unidentified state attorney general are conducting investigations. Congress and federal highway safety regulators also are investigating.
The SEC likely is probing whether GM failed to disclose the switch problem to investors quickly enough, said Peter Henning, a former SEC lawyer who now is a law professor at Wayne State University in Detroit.
GM is recalling 2.6 million older small cars because the switches can unexpectedly slip out of the "run" position. That can shut down the engine, knock out the power-assisted steering and brakes and disable the air bags. Drivers can lose control of their cars and crash.
The company, which has linked 13 deaths to the problem, has acknowledged that engineers knew about it more than a decade ago. Also, CEO Mary Barra has said she was told of the problem in December, yet it was not disclosed in the company's annual report filed in February.
"That's what the SEC is looking at," said Henning. "If it should have been picked up, or it should have been included in the company's financials, it could be a violation of securities law."
A spokeswoman for the SEC would neither confirm nor deny that the agency is investigating. A message was left for a GM spokesman.
GM also disclosed that it faces 60 class-action lawsuits in the U.S. and Canada from people alleging that their cars have lost value because of the recalls. And it faces shareholder lawsuits alleging that it failed to monitor and disclose the ignition switch problem.
More Industry

World EV Adoption Set to Grow
A new report says the segment, despite recent setbacks in some regions, is poised for acceleration as many countries look to reduce pollution.
Read More →
Black Book: Weekly Market Update
Wholesale automotive auction business stayed steady last week as bidders encountered lower prices, analysts observed.
Read More →
Pricing Transparency Drives Purchase Consideration
An annual study by JD Power found that clear pricing matters to consumers on automaker websites, so much so that it increases their purchase consideration.
Read More →
Black Book: Weekly Market Update
Used-vehicle market depreciation was the prevailing story in the wholesale market last week.
Read More →
Smaller Is Looking Better
A growing number of Americans in the market for a new vehicle are opting for more affordable options, not waiting for market stability to bite the bullet.
Read More →
U.S. EV Market Slowly Stabilizes
U.S. electric-vehicle interest is slowly stabilizing since a major dip in sales after last year's end of the federal EV tax credit, and hybrids remain the leading electrified power train.
Read More →
Global EV Market Entering New Phase
Automakers are making investments to lower battery costs and optimize production to meet changing consumer needs.
Read More →
Black Book Weekly Market Update
The holiday weekend, not surprisingly, put a drag on wholesale automotive activity last week, analysts observed.
Read More →
Auto Affordability in Context
Cox Automotive points out the complex circumstances that have led to eye-popping vehicle prices.
Read More →
Black Book: Weekly Market Update
Automotive auction inventory increased last week, giving choosy bidders even more leeway.
Read More →