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SEC probe into ‘sales punching’, becomes the bee in BMW bonnet

The probe comes as US regulators continue to pursue other companies suspected of falsifying data and misleading investors.

Published: 27th December 2019 09:58 AM  |   Last Updated: 27th December 2019 09:58 AM   |  A+A-

cars

For representational purposes

By Express News Service

In addition to a list of legal headaches the BMW Group continues to face, the Securities and Exchange Commission (SEC) has opened another investigation into whether the German luxury carmaker has manipulated sales figures. The regulator, according to multiple reports, is looking into whether the Munich-based automaker is engaged in a practice known as ‘sales punching’ in the US. Sales punching occurs when a company boosts sales figures by having dealers register cars as sold when the vehicles are still standing on car lots.

BMW acknowledged the investigation, but wouldn’t comment on the specifics of the probe. “We have been contacted by the SEC and will cooperate fully with their investigation,” said a BMW spokesperson. An SEC spokesperson said regulators could neither confirm nor deny a probe. The inquiry was reported by The Wall Street Journal.

The probe comes as US regulators continue to pursue other companies suspected of falsifying data and misleading investors. Earlier this year, SEC settled an investigation with Fiat Chrysler over charges that it inflated US sales to keep a monthly streak going. The company has for years paid dealers to report exaggerated sales numbers. The company said at the time that it had reviewed and refined its sales reporting procedures and was committed to maintaining strong controls.  

“New vehicle sales figures provide investors insight into the demand for an automaker’s products, a key factor in assessing the company’s performance,” Antonia Chion, the SEC’s associate director in the division of enforcement, said in a statement in September 2019. “This case underscores the need for companies to truthfully disclose their key performance indicators.” Fiat Chrysler agreed to pay $40 million to settle the SEC claims.

Ending the practice of reporting monthly US sales numbers, Fiat joined General Motors and Ford Motor this year in reporting their sales figure quarterly. Most other carmakers, however, still disclose results each month.BMW also faces litigation by European authorities on allegations of colluding with rivals to manipulate prices on technology to control emissions. The automobile company, which has vowed to fight the case, in April took a $1.1 billion charge against earnings as a provision for potential fines in the matter. 



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