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GM Settles Federal Criminal Charges over Defective Ignition Switch for $900M

Categorized as Class Action Lawyer, Defective Products

The General Motors (GM) saga over a defective ignition switch is almost complete as the auto manufacturer has agreed to settle a federal criminal investigation for $900 million.

Federal prosecutors charged GM with wire fraud and engaging in a plan to conceal a deadly safety defect. However, no specific GM employees have been charged criminally for a defective ignition switch that contributed to at least 124 deaths.

Along with the settlement, General Motors must hire an independent monitor to examine any further recalls it issues within the next three years. If the company complies with the terms of the agreement, the criminal charges would be dismissed.

Separately, GM also reached a settlement in nearly 1,400 cases involving victims of the defect. Another shareholder lawsuit over its handling of the matter was also settled during this time period. All in all, the two civil settlements cost the company $575 million.

The defective ignition switch has cost GM billions of dollars, though the company has noted it set aside $4 billion to cover costs linked to the defective ignition switch.

While hundreds of families and victims have received compensation for their losses, many still feel spurned over the Justice Department’s decision to not file criminal charges against individual GM employees. Documents have shown that some employees knew about the defect for ten years, but did nothing to warn the public or federal regulators about the risks associated with the defect.

While GM paid a record-setting $35 million civil penalty to the National Highway Traffic Safety Administration, the settlement with the Justice Department is less than what Toyota had to pay after it was charged with wire fraud.

Hundreds of people have suffered as a result of GM’s negligence. At Peterson & Associates, we firmly believe that when companies, like GM, put the public at risk, they need to be held accountable for their actions.

If you have been hurt as a result of a product defect, contact our product liability attorneys for a free legal consultation.