BMW fined $18 mn in U.S. over inflated sales dataChristian Fernsby ▼ | September 25, 2020
The Securities and Exchange Commission announced settled charges against BMW AG and two of its U.S. subsidiaries for disclosing inaccurate and misleading information about BMW’s retail sales volume in the U.S. while raising approximately $18 billion from investors in several corporate bond offerings.
The order finds that BMW of North America LLC (BMW NA) maintained a reserve of unreported retail vehicle sales — referred to internally as the “bank” — that it used to meet internal monthly sales targets without regard to when the underlying sales occurred.
The order also finds that BMW NA paid dealers to inaccurately designate vehicles as demonstrators or loaners so that BMW would count them as having been sold to customers when they had not been.
Additionally, the order finds that BMW NA improperly adjusted its retail sales reporting calendar in 2015 and 2017 to meet internal sales targets or bank excess retail sales for future use.
As a result, according to the order, the information that BMW provided to investors in the bond offerings by BMW’s U.S. financing subsidiary, BMW US Capital LLC, and to credit rating agencies contained material misstatements and omissions regarding BMW’s U.S. retail vehicle sales.
The SEC’s order finds that BMW AG, BMW NA, and BMW US Capital violated antifraud provisions of Sections 17(a)(2) and (3) of the Securities Act of 1933. Without admitting or denying the order’s findings, the three companies agreed to pay a joint penalty of $18 million and to cease and desist from future violations of these provisions. ■