Fiat Chrysler Slapped|With Investor Lawsuit

     MANHATTAN (CN) – Fiat Chrysler is on the receiving end of yet another class-action lawsuit over safety and computer problems that led the company’s stock price to plunge over the summer.
     In a complaint filed in Manhattan Federal Court on September 11, investors in the automotive giant claim the company deceived them by withholding crucial information about vehicle safety problems in order to inflate the stock price.
     “As a result of the dissemination of … false and misleading reports, releases, and public statements, the market price of Chrysler securities was artificially inflated,” the complaint says.
     Specifically, the Fiat Chrysler failed to disclose manufacturing problems or quality control flaws that “rendered 3.1 million Chrysler cars and trucks unsafe to drive.”
     Lead plaintiff Victor Pirnik alleges that at the time of the 2014 merger of Fiat and Chrysler, neither party adequately discloses problems that Chrysler had, such as a then-pending recall of Jeep Grand Cherokees and Dodge Durango SUVs for potential braking problems.
     The two automobiles had been equipped with faulty suspension components that could have lead to component breakage and instability. After the June 2015 recall, Chrysler stock dropped nearly seven percent, the complaint says.
     A month later Chrysler recalled the an additional 1.4 million of the vehicles due to security flaws found in the automobiles’ computers, which hackers could have exploited to cut the brakes, shut down the engine, or steer the cars off the road. The problem, some experts say, is that the automobiles’ music systems, which are easily hackable, are connected to its brake systems. The company stock dropped another 2.5 percent following the July recall.
     Following the recall, the National Highway Traffic Safety Administration fined Chrysler $105 million for a myriad of problems related to 23 safety recalls issued by the company. All told, these flawed recalled impacted 11 million vehicles. The fine is the agency’s largest to date.
     In addition, Chrysler also agreed to allow customers to sell back their defective vehicles to the company for above-market value, or else receive financial incentives to fix their vehicles.
     “Fiat Chrysler’s pattern of poor performance put millions of its customers, and the driving public, at risk,” NHTSA Administrator Mark Rosekind said in a statement at the time. Fiat Chrysler’s stock fell a third time, by 4.9 percent, shortly thereafter.
     The latest recall, announced on Sept. 4, affected nearly 8,000 Jeep Renegade SUVs, and led to a stock drop of almost 2 percent. Fiat Chrysler’s stock has dropped from $14.53 in late June to $13.60 in September.
     The company’s stock price has recovered much of that loss, however. As of Sept.14, the company stock is at $14.37.
     Fiat Chrysler is already the target of a lawsuit stemming from its recall problems. This one, filed in Canada, seeks $5.2 billion in damages for aggrieved shareholders.
     The company also was sued in August by Jeep Cherokee owners over the automobile’s vulnerability to software hacking. The lawsuit alleges that Fiat Chrysler’s July recall does not fix the problem.
     Fiat Chrysler did not immediately respond to requests for comment. Plaintiffs’ attorney Jeremy Lieberman did not return calls for comment.

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