GM faces SEC inquiry alongside federal, state investigations

General Motors has confirmed that it is currently under scrutiny by the Securities and Exchange Commission and several other federal and state agencies, while the number of lawsuits filed against the company has continued to grow.

The company already acknowledged an inquiry spearheaded by the National Highway Traffic Safety Administration, which itself faces an investigation into the ignition-switch recall handling, however GM’s latest financial disclosures shed light on a wider range of interest.

A form 8-K filed with the SEC notes that GM is the “subject of various inquiries, investigations, subpoenas and requests for information from the U.S. Attorney’s Office for the southern district of New York, Congress, NHTSA, the SEC, and a state attorney general in connection with our recent recall.”

The company highlights its ongoing internal investigation and belief that it is cooperating fully with all investigations, aside from the fines levied by the NHTSA for failure to respond, though it acknowledges that some of the investigations and lawsuits could lead to “damages, fines or civil and criminal penalties.”

“Through April 22, 2014 we are aware of 55 putative class actions have been filed against GM in various U.S. District Courts since the recall announcement alleging that consumers have been economically harmed by the recall and/or the underlying vehicle condition,” the disclosure adds. “In the aggregate, these cases seek recovery for compensatory damages, including for alleged diminution in value of the vehicles, punitive damages and injunctive and other relief.”

The company posted a $1.3 billion charge in the first quarter to cover recall costs, slashing profit down to just $125 million, however the funds do not include any provision for lawsuit settlements or government penalties.

“We are currently unable to estimate a range of reasonably possible loss for the lawsuits and investigations because these matters involve significant uncertainties at these early stages,” the filing concludes.

Aside from direct payouts related to the ignition-switch debacle, GM also acknowledges that the lawsuits and government investigations could negatively impact its reputation and sales. Executives have separately claimed that no such effects have been observed, however the company’s first-quarter shipments grew by two percent as sales from rivals Toyota and Volkswagen climbed by six percent.