— General Motors has lawsuits piling up over the failure to recall cars with an ignition switch defect, and now comes a lawsuit related to federal securities laws.
The lawsuit, filed in a U.S. District Court of the Eastern District of Michigan, claims GM and some of its officers made false and/or misleading statements about GM's business operations.
The lawsuit specifically alleges:
1. GM was in breach of industry and government regulations and policies concerning auto safety.
2. GM was subject to criminal and civil litigation and potentially devastating harm to its reputation and future revenues.
3. Over three million GM cars contained defects subjecting drivers, passengers and others to devastating, and at times, fatal injuries.
4. GM lacked adequate internal controls and despite knowing of such potential harm to drivers and passengers, refused to recall such vehicles.
5. GM statements were materially false and misleading at all relevant times.
The class-action lawsuit includes all persons or entities who purchased or acquired securities of GM between November 17, 2010, and March 21, 2014.
The securities lawsuit was filed at the same time Morgan Stanley downgraded GM's stock and lowered its price target by 16-dollars a share to $33 per share.
General Motors said they will take a charge of approximately $1.3 billion in the first quarter, primarily for the cost of recall-related repairs announced in 2014. The recalls include the defective ignition switch, power steering problems, and broken axles and transmission leaks.