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General Motors could face criminal charges

Posted on Wednesday, May 27th, 2015   

After more than a year of deliberation by federal prosecutors, General Motors may be held criminally responsible for their failure to disclose an ignition switch defect that is linked to at least 104 fatal accidents. Over the last year, G.M. has recalled more than 30 million vehicles worldwide.

At the moment, investigators with the Justice Department are in the process of negotiating a penalty with G.M. that is thought to exceed the $1.2 billion benchmark that Toyota paid last year. Unlike Toyota, however, G.M. is reportedly eager to conclude the investigation. As a result, it is believed that the company will likely gain some leniency for their cooperation.

Though the Justice Department’s investigators identified criminal wrongdoing in the case, prosecutors and G.M. are also still in negotiations as to which elements of misconduct the company will be willing to admit. Criminal charges may also be sought against a number of former G.M. employees.

It is possible that G.M. may be forced to plead guilty to a crime, but federal prosecutors may choose to negotiate a deferred-prosecution agreement similar to that negotiated with Toyota. If they elect to pursue the latter scenario, G.M. would likely also be expected to allow regulators to continue to review its safety practices, along with any other stipulations negotiated by federal prosecutors.

Whatever happens with the Justice Department, G.M. still faces an uphill battle with state attorneys general who are pursuing consumer fraud investigations, in addition to numerous lawsuits for personal injury and wrongful death.

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