- California AG Xavier Becerra reached a settlement with General Motors LLC (“GM”) to resolve allegations that it made false and misleading statements to investors regarding the costs associated with curing the defective ignition switches installed in some of its cars in violation of the California False Claims Act and the Corporate Securities Law of 1968.
- According to the AG’s office, GM recalled over nine million vehicles in the U.S. over faulty ignition switches, which have reportedly led to hundreds of fatalities and injuries. Despite its knowledge of the need for the recalls, GM allegedly concealed the scale of the problem from investors and failed to build reserves for the anticipated losses, causing California investors, including the California Public Employees’ Retirement System, to lose millions of dollars.
- Under the terms of the settlement agreement, GM will pay $5.75 million, of which $3.85 million will constitute restitution to eligible investors.