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Thursday, September 17, 2015

General Motors Will Pay $900 Million Criminal Settlement For Ignition Switch Defect [Video]

After a Justice Department investigation into the faulty ignition switch in General Motors' (GM) vehicles that led to over 120 deaths, the automaker has agreed to pay criminal settlement charges of $900 million. Federal prosecutors brought down the hammer on a few charges including wire-fraud.

USA Today news report posted earlier today says prosecutors came down on GM with a wire-fraud charge and a charge for "engaging in a scheme to conceal a deadly safety defect" from regulators. Those counts, however, can be dismissed in three years if GM fixes its recall processes.

The Justice Department will appoint a monitor to oversee the automaker's recall processes for three years.

Also, U.S. Attorney Preet Bharara left the door open to prosecuting specific GM employees. But he also added it would be difficult to pin the blame on an individual in this case.

According to the Justice Department investigation report, GM engineers, attorneys and executives failed to fix the defect for more than a decade. As a part of the settlement GM admitted to having defrauded customers by marketing its vehicles as safe during that period.

GM CEO Mary Barra apologized again for the company's behavior and said she's overhauled internal procedures to encourage efficient communication and transparency. The company did fire "wrongdoers" related to the ignition switch issue but no individuals have been charged yet. Families of victims expressed disappointment over this.

Before today's deal with additional victims, the automaker had already agreed to offer settlements for families of 124 people who were killed and 275 who were injured. These people may still get compensated as a part of today's settlement which was negotiated by Texas attorney Bob Hillard. And there are additional potential injury victims and deaths who may pursue settlements.

GM said the plaintiffs, which it said numbered 1,380, represent about 60% of the personal-injury lawsuits it faces.

You can read the entire news report on USA Today. There's a video from Newsy which you can watch below.

Source: USA Today
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