GM ignition switch recall: SEC opens investigation
DETROIT — U.S. securities regulators are looking into General Motors' delayed recall of more than 2 million cars with a deadly ignition switch problem.
GM disclosed in a quarterly report Thursday that the Securities and Exchange Commission has made inquiries about the recall. It also confirmed for the first time that the U.S. Attorney's office in New York and an unidentified state attorney general are conducting investigations. Congress and federal highway safety regulators also are investigating.
The SEC likely is probing whether GM failed to disclose the switch problem to investors quickly enough, said Peter Henning, a former SEC lawyer who now is a law professor at Wayne State University in Detroit.
GM is recalling 2.6 million older small cars because the switches can unexpectedly slip out of the "run" position. That can shut down the engine, knock out the power-assisted steering and brakes and disable the air bags. Drivers can lose control of their cars and crash.
The company, which has linked 13 deaths to the problem, has acknowledged that engineers knew about it more than a decade ago. Also, CEO Mary Barra has said she was told of the problem in December, yet it was not disclosed in the company's annual report filed in February.
"That's what the SEC is looking at," said Henning. "If it should have been picked up, or it should have been included in the company's financials, it could be a violation of securities law."
A spokeswoman for the SEC would neither confirm nor deny that the agency is investigating. A message was left for a GM spokesman.
GM also disclosed that it faces 60 class-action lawsuits in the U.S. and Canada from people alleging that their cars have lost value because of the recalls. And it faces shareholder lawsuits alleging that it failed to monitor and disclose the ignition switch problem.
More Industry

RV Group Expands Carolina Footprint
Blue Compass RV Columbia Northeast is the 13th RV dealership owned by Blue Compass in the Carolinas.
Read More →
Agent Acumen
An Agent Summit panel of people who’ve been supporting auto dealers for years gave both timely and timeless advice for those starting out or mulling the prospect.
Read More →
Missed Maintenance Creates Opportunity
As families get back on the road and into daily school routines, service drives have an opportunity to capture customers who are behind on recommended vehicle maintenance.
Read More →
Mitsubishi Unveils U.S. Plan
The automaker announced a strategy that includes an expanded lineup and dealership presence, along with more ‘rugged’ and electric models.
Read More →
Selling to Grow
The question of whether you should sell your agency and if so, when, is up to you. But it’s a question worth asking to ensure you keep the business on the right path for yourself, employees and clients.
Read More →
Recalled Vehicles Hit 5-Year High
Though the number of events has fallen so far this year, impacted units are up significantly. Meanwhile, regulators consider consumer notification changes.
Read More →
Auto Group Acquires Top-Performing Rooftop
Car Pros sold its Kia Huntington Beach location to Sutherlin Automotive Group, marking the buyer’s third location in Southern California.
Read More →
China as Pacesetter
Automotive leaders huddled on where North America stands in the global picture and how it can strengthen its position against the Asian juggernaut’s surging industry.
Read More →
BMW Concept Car Makes Fuel to Burn
The prototype developed in concert with a South Carolina university engineering team generates more solar energy than it uses in a typical daily commute.
Read More →
South Carolina Auto Group Downsizes
Florida-based group Holler-Classic has acquired four rooftops, its first in South Carolina, from Dick Smith Automotive Group.
Read More →