Judge orders GM ignition switch documents saved
A federal judge in Detroit on Wednesday ordered General Motors' longtime auditor, a former supplier, two lead underwriters of the Detroit automaker's IPO, rental car companies and Wall Street analysts to preserve documents related to the Detroit automaker's ignition switch recall.
The New York State Teachers' Retirement System — a pension fund with $108 billion in assets and 426,000 covered employees and retirees — is the lead plaintiff in a suit against GM over the delayed recall of 2.6 million vehicles. The pension fund is the lead plaintiff in a securities fraud class-action lawsuit that claims the "faulty ignition switches in GM vehicles caused loss to the value of their investments."
The pension fund asked U.S. District Judge Linda Parker to order the following to preserve documents that may be relevant: GM's longtime auditor Deloitte & Touche; the supplier of the defective ignition switch, Delphi Corp.; the lead underwriters of GM's 2010 initial public offering, J.P. Morgan Securities LLC and Morgan Stanley & Co.; rental car companies that had the defective GM vehicles in their fleets; and eight Wall Street analysts.
The firms haven't yet been asked to turn over any documents.
Parker ruled that allowing the pension fund "to serve the proposed preservation subpoenas ... will maintain the status quo until the court rules on defendants' pending motions to dismiss."
GM's delayed ignition switch recall is now linked to at least 80 deaths and is the subject of investigations by the Justice Department, Securities and Exchange Commission, 49 state attorneys general and Transport Canada. In May, GM paid a then-record $35 million fine to the National Highway Traffic Safety Administration and agreed to up to three years of intensive federal oversight.
In a separate group of cases before U.S. District Judge Jesse Furman in New York covering economic loss claims, personal injury and wrongful death claims, GM has been required to turn over to the lawyers suing it all documents it provided to Congress, NHTSA and other government agencies, as well as pursuant to its internal investigation led by lawyer Anton Valukas.
Furman also ordered GM to provide the names of all witnesses interviewed during Valukas' investigation who were not named in the report ultimately prepared by him.
The amended 542-page lawsuit filed against GM alleges shareholders and other investors lost billions because of GM's fraud.
Last month, GM asked the court to throw out the lawsuit that also names former CEO Dan Akerson and current CEO Mary Barra, among others.
GM lawyers say the case should be dismissed because simply accusing it of not finding the ignition switch issue and initiating a recall sooner is not evidence that the automaker intended to defraud shareholders.
GM lawyers say the "strategy appears to be to bury the court in such an avalanche of words that the court will simply conclude the path of least resistance is to deny a motion to dismiss and leave to defendants the near-impossible task of drafting an answer."
The response also says that GM's operational problems are not the same as a lack of financial controls and argues the shareholders haven't shown it committed securities fraud.