There has been an ongoing criminal investigation of how General Motors Company (NYSE:GM) which is the Detroit automaker obscured a deadly problem with small-car ignition switches. However, according to three people briefed on the case, the investigation will come to a settlement once the Federal Prosecutors makes their announcement on the same.
Nevertheless GM will have to pay a penalty of around $900 million in a postponed tribunal agreement on a wire fraud charge. And if GM complies with the laid out terms for three years any charges would be dismissed. The arrangement was first reported on Wednesday but to this minute neither the GM spokesman Patrick Morrissey nor the spokeswoman for Manhattan U.S. Attorney Preet Bharara has given comments on it.
General Motors Company (NYSE:GM) recalled 2.6 million older small cars globally so as to replace the faulty switches. Reports have it that the problem on the cars caused deaths to 124people through crashes while 275more suffered various injuries. However, families of those who died are receiving compensation of at least $1 million. On the other side, through a fund of $625 million GM will reimburse people who accept a settlement.
The Company has since indicated that some of its employees were well aware of the problem for a long time but recalling of cars only began last year. However, it is still unclear whether any persons will be charged in the ignition switch probe. 15 employees including engineers and lawyers have been fired in relation to the switch problem.
Earlier in 2014, a $35 million of civil penalty was imposed on General Motors Company (NYSE:GM) by the National Highway Traffic Safety Administration. The Company was in abuse of federal law since it did not notify the government of safety-related defects within the stipulated timeline of five days after learning about them.
Meanwhile, legal analysts say that as a result of its cooperation during the investigation, GM’s fine is likely to be less than that of Toyota. For hiding information about defects in Toyota and Lexus vehicles, Toyota was slapped with a $1.2 billion penalty. The defects made the vehicles accelerate unexpectedly resulting in injuries and deaths.
