Shareholders sue Fiat Chrysler, Marchionne estate over racketeering case
Shareholders are suing Fiat Chrysler Automobiles NV, the estate of its late CEO Sergio Marchionne and top executives over unspecified losses following a racketeering case filed by General Motors Co.
The Rosen Law Firm of New York has filed a lawsuit to bring a class-action lawsuit against the company, taking aim at defendants, including CEO Mike Manley, executors of Marchionne's estate and Chief Financial Officer Richard Palmer, who were not included in GM's case. They knowingly misled investors, resulting in artificially inflated stock prices, according to the law firm's suit.
"The theory is that the company issued misleading information, such as in its annual report," said Phillip Kim, a partner at Rosen. "Those are the folks who were responsible for the documents and certifying the accuracy of those documents. They signed the documents that are alleged to be falsely misleading."
Those actions, according to the lawsuit, led to monetary losses for shareholders after GM filed its case last month alleging Marchionne masterminded a conspiracy, including bribery, that corrupted three rounds of bargaining with the United Auto Workers and harmed GM.
Fiat Chrysler has called GM's claims "groundless," and the racketeering charges will be difficult to prove, experts say. But they cast a shadow on the legacy of Marchione, who has been held as a giant in the auto industry.
Fiat Chrysler did not respond immediately to request for comment. Attempts on Tuesday to contact Roland Iseli and Alessandro Baldi, co-executors of Marchionne's estate, were unsuccessful.
Fiat Chrysler investors have until Jan. 31 to sign onto the suit as a plaintiff.