US fines BMW $18 million for inflating sales figures
BMW must pay a fine of $18 million to resolve allegations that it inflated its monthly sales figures in the United States for five years in a row.
The U.S. Securities and Exchange Commission (SEC) said Thursday that the German luxury carmaker maintained a reserve of undeclared sales that it used to meet its 2015-2019 monthly targets.
BMW disclosed the misleading information while raising about $18 billion in various corporate bond offerings, the regulatory agency said.
Companies that access US markets to increase their capital have an obligation to provide reliable information to investors, Stephanie Avakian, the director of the SEC's oversight division, said in a statement.
The shares helped BMW maintain a leading position in retail sales among other luxury automakers, the agency noted.
BMW of North America also improperly adjusted its sales reporting schedule in 2015 and 2017 to meet internal targets or to accumulate excess sales for use in future months, according to the SEC. The undeclared sales reserve is known internally as "the bank," the agency added. BMW also paid dealerships to designate vehicles as demo or loan so they could be counted as sales, the SEC said.
The SEC said BMW cooperated with its investigation, even as the coronavirus pandemic forced it to close its offices and have its employees work from home. Cooperation was taken into account when the sentence was imposed, the agency noted.
BMW AG, BMW of North America and BMW US Capital did not admit or deny the agency's findings. The three entities agreed to pay the fine and stop violating securities laws.
In a statement, BMW said much of the reported conduct occurred more than three years ago and was negligent. There is no allegation or finding in the order that any BMW entity has been intentionally infringing, the company said. The BMW Group attaches great importance to the accuracy of its sales figures and will continue to focus on sales reports. complete and congruent.
BMW is the second automaker to face penalties for inflating its sales figures in recent years.
Last year, Fiat Chrysler agreed to pay $40 million to settle an SEC complaint alleging the company misled investors by overstating its monthly figures over five years. The company inflated its sales figures by paying dealers to report false numbers from 2012 to 2016, the SEC claimed in a complaint.
BMW disclosed the misleading information while raising about $18 billion in various corporate bond offerings, the regulatory agency said.
Companies that access US markets to increase their capital have an obligation to provide reliable information to investors, Stephanie Avakian, the director of the SEC's oversight division, said in a statement.
The shares helped BMW maintain a leading position in retail sales among other luxury automakers, the agency noted.
BMW of North America also improperly adjusted its sales reporting schedule in 2015 and 2017 to meet internal targets or to accumulate excess sales for use in future months, according to the SEC. The undeclared sales reserve is known internally as "the bank," the agency added. BMW also paid dealerships to designate vehicles as demo or loan so they could be counted as sales, the SEC said.
The SEC said BMW cooperated with its investigation, even as the coronavirus pandemic forced it to close its offices and have its employees work from home. Cooperation was taken into account when the sentence was imposed, the agency noted.
BMW AG, BMW of North America and BMW US Capital did not admit or deny the agency's findings. The three entities agreed to pay the fine and stop violating securities laws.
In a statement, BMW said much of the reported conduct occurred more than three years ago and was negligent. There is no allegation or finding in the order that any BMW entity has been intentionally infringing, the company said. The BMW Group attaches great importance to the accuracy of its sales figures and will continue to focus on sales reports. complete and congruent.
BMW is the second automaker to face penalties for inflating its sales figures in recent years.
Last year, Fiat Chrysler agreed to pay $40 million to settle an SEC complaint alleging the company misled investors by overstating its monthly figures over five years. The company inflated its sales figures by paying dealers to report false numbers from 2012 to 2016, the SEC claimed in a complaint.
