California’s Attorney General and General Motors (GM) entered into a $5.75 million agreement to settle claims that the car manufacturer misinformed investors regarding the costs the company would incur due to its ignition switch and airbag defects, according to media reports.
The Feb. 12 agreement was signed by deputy Attorney General Sylvia W. Keller and attorney Craig Glidden on behalf of GM.
The litigation was initially lodged in 2015 when now U.S. Vice President Kamala Harris was California's attorney general.
The settlement states that after an investigation, the attorney general accused GM of violating California’s Corporate Securities Law by allegedly making misleading statements to CalPERS and CalSTRS both of which manage retirement and other benefits for California employees.
“It’s good to end the dispute without further time and money being spent,” said Karl Brauer, executive analyst with iSeeCars in Orange County.
Some $3,852,500 of the settlement amount is earmarked as restitution for persons who were allegedly harmed by conduct detailed in the agreement.
“It’s an amount of money that benefits California and its constituents without being an undue burden on GM,” Brauer told the Southern California Record.
The conduct covered by the settlement includes:
Statements, claims, or disclosures to investors involving recalls and allegations in the original class action complaint
Alleged violations of the California False Claims Act (“CFCA”) related to claims for payment to CalPERS and CalSTRS.
Alleged failure to disclose recalls involving ignition switch and airbag defects November 17, 2010, IPO documents and SEC filings that followed
The agreement excludes admission of any fault, liability, wrongdoing, damages, or unlawful or wrongful conduct by GM or the Attorney General. As a result of the settlement, there will be no trial, adjudication, or fact-finding.
“It’s a positive resolution for both parties,” Brauer said.
The AG's office will receive the payment of $5,750,000 from GM within 30 days.