According to the complaint, FCA is an international automotive group engaged in designing, engineering, manufacturing, distributing, and selling vehicles, components, and production systems. The company’s vehicles are produced for the mass market under the Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia, and Ram brands and the SRT performance vehicle designation. The company sells vehicles in the United States through its subsidiary FCA US LLC (“FCA US”), a Delaware corporation headquartered in Auburn Hills, Michigan.
The complaint alleges that throughout the Class Period, the defendants made false and misleading statements and failed to disclose material adverse facts about the company’s business and operations. Specifically, the complaint alleges that the defendants misrepresented the company’s growth by purposefully inflating FCA’s vehicle sales numbers and falsely touting monthly vehicle sales growth (on a year-over-year basis).
The Class Period commences on October 29, 2014, when the company filed its third-quarter 2014 financial results, filed on Form 6-K with the United States Securities and Exchange Commission (“SEC”). The Form 6-K reported total sales of 633,000 vehicles in FCA’s “NAFTA” region, which includes the U.S., Canada and Mexico, for the third-quarter 2014, representing an 18% increase from the third-quarter 2013.
According to the complaint, on January 12, 2016, an FCA-affiliated dealer filed a lawsuit accusing FCA US of paying dealers to improperly inflate vehicle sales numbers by reporting unsold vehicles as sold and then reversing those sales during the following month. Following this news, over two trading days, the price of the company’s common shares declined $0.66 per share, or more than 8%, to close at $7.53 per share on January 14, 2016.
Then, on July 18, 2016, FCA issued a press release confirming that it was cooperating with an SEC investigation into the reporting of vehicle sales to “end customers” in the U.S. and that the U.S. Department of Justice had made similar inquiries. Following this news, over two trading days, the price of the FCA’s shares declined $0.19 per share, from a close of $6.75 per share on July 15, 2016, to close at $6.56 per share on July 19, 2016.
Finally, on July 26, 2016, FCA announced that it had revised the way it reports monthly U.S. vehicle sales, revealing that its much publicized 75-month streak of monthly vehicle sales growth (on a year-over-year basis) actually ended at 40 months in September 2013.
If you are a member of the class described above, you may no later than September 27, 2016, move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
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Kessler Topaz Meltzer & Check, LLP
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