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Fiat Chrysler to pay $9.5M fine in diesel emissions cheating scandal

Breana Noble
The Detroit News

Fiat Chrysler Automobiles NV will pay a $9.5 million penalty to settle allegations that it misled investors in 2016 over its vehicles' diesel emissions, the U.S. Securities and Exchange Commission said Monday.

The agreement is one piece of a greater case brought against the Italian American automaker over allegations that it used defeat devices to cheat on emissions testing. Similar cases have been brought and settled against other automakers, including Volkswagen AG and BMW, and auto supplier Bosch.

Fiat Chrysler will pay a $9.5 million SEC penalty as part of larger settlement over allegations that it sold vehicles that violated U.S. clean-air rules. The case involves diesel-powered Jeep Grand Cherokee SUVs, shown, and Ram 1500 pickups from model years 2014-16 that regulators say were sold with emission software that violated U.S. clean-air rules.

Fiat Chrysler did not immediately have comment. The case against FCA concerns 104,000 Jeep Grand Cherokee SUVs and Dodge Ram 1500 pickups from the 2014-16 model years with 3-liter V-6 diesel engines.

The SEC agreement is a small portion of what FCA will pay in connection with the investigation. Total settlement costs previously were expected to be nearly $800 million in penalties to several government agencies and payments to drivers with affected models. The company was not required to admit guilt, though Emanuele Palma, the company's senior manager of diesel engine calibration, was indicted last year on charges related to claims of the company's use of the software defeat devices.

An internal audit found that the automaker's vehicles complied with emissions regulations, but the company did not disclose the limited scope of the review, according to the SEC. The audit focused on finding a certain type of defeat device that interferes with or disables emissions controls when vehicles are on the road versus being assessed by the government.

Federal regulators have alleged that FCA did not disclose at least eight auxiliary emission control devices on the Jeeps and pickups covered under the settlement. Automakers can legally deactivate a vehicle’s emission control system under certain conditions, but regulators require the disclosures when companies apply for certificates that are required to sell cars in the U.S.

“This case demonstrates the importance of public companies providing accurate and complete information to investors,” Joel Levin, regional director of the SEC’s Chicago Regional Office, said in a statement. “At a time of heightened scrutiny of automakers’ regulatory compliance, FCA provided misleading assurances to investors by not disclosing the limitations of its internal audit.”

bnoble@detroitnews.com

Twitter: @BreanaCNoble