GM Settling Ignition Switch Class-Action Lawsuit

Print this Article | Send to Colleague

General Motors is moving towards a $300 million deal that will end a class-action lawsuit that charges the automaker with concealing the deadly ignition-switch defects, which drove down the value of GM stock.

The New York State Teachers’ Retirement System filed papers in the federal court for the Eastern District of Michigan asking for approval of the $300 million deal, which will end a consolidated class action claiming General Motors Co.’s stock price was inflated during a period when the company concealed ignition-switch defects that the plaintiffs say killed more than 124 motorists.

The $108.2 billion pension fund was approved as lead plaintiff in a class-action lawsuit last year in which the plaintiffs claimed GM committed fraud by failing to disclose the scope of the problem of faulty ignition switches. Costs of the ignition switch scandal has now topped more than $5 billion and continue to grow.

The New York State Teachers’ Retirement System pension fund owns about $98 million in GM shares, and it claimed an estimated loss of $6.23 million between November 17, 2010, and March 10, 2014 — the period cited in the suit against GM.

The original complaint against GM stated the company during the post-bankruptcy IPO "touted the safety, quality and reliability of GM vehicles ... despite their knowledge that millions of GM vehicles were plagued with faulty ignition switches."

Throughout the class period, defendants made allegedly false and/or misleading statements, and failed to disclose materially adverse facts related to the quality and safety of GM vehicles and defects in those vehicles, the lawsuit said. 

Back to NAFA Connection