The Detroit Free Press reports GM was not fined by the SEC, but the auto giant agreed to follow SEC regulations in the future and is subject to a federal injunction under which it would face stiff penalties for any future violations. GM did not admit or deny any wrongdoing.
“The injunctive remedy should provide strong incentives for General Motors to maintain strong accounting and disclosure practices,” said Frederic Firestone, associate director in the SEC’s enforcement division, in the news report.
The SEC alleged in its 2004 lawsuit that GM made significant misstatements or omissions in a 2002 filing about its pension discount rate for 2002 and its expected return on pension assets for 2003. The complaint also alleged that GM failed to disclose material information about the timing and amount of its projected cash contributions to its pension plans, according to the Free Press.
GM said it made mistakes, but not with the intent to deceive shareholders.
The automaker recently agreed to pay about $39 million to settle a lawsuit over company stock investments in its 401(k) plan (see GM Settlement of Company Stock Suit to Include $39M Payment ). That suit claimed the company put its interests ahead of the interests of plan participants by continuing to offer GM stock as an investment option, matching employee contributions in GM stock, and failing to diversify the stock fund when it was clear GM stock was not a prudent investment during the time GM was struggling financially and its accounting was being reviewed by the SEC.