According to the law firm press release, 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 U.S. subsidiary, FCA US LLC ("FCA US").
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 to investors. Specifically, the defendants misrepresented the Company's growth by purposefully inflating FCA's vehicle sales numbers and falsely touting the Company's streak of U.S. monthly vehicle sales growth (on a year-over-year basis).
As detailed in the complaint, the truth about FCA's business practices began to surface on January 12, 2016, when 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 fictional sales during the following month. After news outlets reported the lawsuit, the price of the Company's common shares declined $0.66 per share, or more than 8%, from a closing price of $8.19 per share on January 12, 2016 to close at $7.53 per share on January 14, 2016.
On July 18, 2016, several news outlets reported that the Department of Justice ("DOJ") and the Securities and Exchange Commission ("SEC") were investigating the Company's sales practices. On that same day, FCA issued a press release confirming that it was cooperating with an SEC investigation into FCA's reporting of vehicle sales to "end customers" in the U.S., and that the DOJ was also investigating. Following this news, the price of the Company's common shares declined $0.19 per share, or nearly 3%, from a closing price 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, the Company announced that it had revised the way it reports monthly U.S. vehicle sales – revealing that its much publicized 75-month streak of U.S. monthly vehicle sales growth (on a year-over-year basis) actually ended at 40 months in September 2013.
On January 18, 2017, Lead Plaintiffs and Counsel were appointed. Lead Plaintiffs filed a consolidated Complaint on March 17. Defendants filed a Motion to Dismiss the consolidated Complaint on May 17. On December 14, 2017, the Court issued an Order denying Defendants' Motion to Dismiss the consolidated Complaint.
On January 31, 2019, the parties entered into a Stipulation and Agreement of Settlement. The Court issued an Order preliminarily approving the Settlement on February 20.