F Ford Motor Company

By William Boston in Berlin and Mike Colias in Detroit 

BERLIN -- The Securities and Exchange Commission has opened an investigation into German luxury car maker BMW AG, a company spokesman said on Monday.

The SEC is looking into whether the Munich-based auto maker engaged in the practice known as sales punching in the U.S., according to people familiar with the matter.

Sale punching occurs when a company boosts sales figures by having dealers register cars as sold when the vehicles actually are still standing on car lots.

"We have been contacted by the SEC and will cooperate fully with their investigation," the spokesman told The Wall Street Journal, declining to elaborate further on the investigation.

The SEC couldn't immediately be reached for comment.

The probe comes as the U.S. officials continue to pursue companies suspected of falsifying data and misleading investors.

Fiat Chrysler Automobiles N.V. in September agreed to pay $40 million to settle claims by the SEC that the company had for years paid dealers to report exaggerated sales numbers. The company said at the time it had reviewed and refined its sales reporting procedures and was committed to maintaining strong controls.

The company also revised monthly sales results going back several years, nullifying a 75-month streak of sales increases. Under those revised methods, the streak ended in September 2013, three years earlier than previously stated.

This year, Fiat Chrysler joined General Motors Co. and Ford Motor Co. in ending the practice of reporting monthly U.S. sales numbers. The Detroit companies now report their U.S. sales quarterly, while most other major car companies still disclose results each month.

The SEC investigation also follows 2015 indictments against Volkswagen AG on charges of defrauding U.S. consumers and the U.S. government and violating the Clean Air Act by rigging diesel-powered vehicles to cheat emissions test. That case was brought by the Justice Department.

Volkswagen pleaded guilty to the charges in 2016 and has faced more than $30 billion in fines, penalties, and compensation fees.

In addition, BMW faces litigation by European authorities on allegations of colluding with rivals to manipulate prices on technology to control emissions. BMW, which has vowed to fight the case, in April took a $1.1 billion charge against earnings as a provision for potential fines from the case.

BMW sold 322,862 vehicles in the U.S. in the first nine months of the year, an increase of 1.7% from a year ago, including its namesake BMW brands and its Mini brand.

BMW also has been under pressure in the U.S. because of the Trump administration's trade war with China, which has hit BMW's SUV exports from its Spartanburg, S.C., factory. BMW has responded by shifting some production from the U.S. to China.

Nora Naughton in Detroit contributed to this article.

Write to William Boston at william.boston@wsj.com and Mike Colias at Mike.Colias@wsj.com

(END) Dow Jones Newswires

December 23, 2019 18:50 ET (23:50 GMT)

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