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The Two-Way

Feds Investigate Fiat Chrysler Over Car Sales

Federal authorities are investigating Fiat Chrysler over allegations that it encouraged dealers to falsely report the number of cars sold, the automaker confirmed Monday.

In a statement, the company said it was cooperating with a Securities and Exchange Commission investigation and that the numbers in its financial statements were based on shipments to dealers, not on sales to customers.

Fiat Chrysler also added it had fielded questions from the Justice Department on a similar matter. The Wall Street Journal reports that FBI agents visited the homes of Fiat regional managers "allegedly involved in the potential misconduct."

Furthermore, the Journal reports, the investigation seems centered on allegations made in a lawsuit filed by an Illinois car dealer in January alleging that Fiat Chrysler had "manipulated" new-vehicle sales:

"The dealer, Napleton Automotive Group, accused Fiat Chrysler of financially rewarding stores that manipulated sales reports, inflating the company's overall U.S. sales results. Napleton operates dealerships in Illinois and Florida.

"The lawyer for Napleton, Steve Berman, said the people the FBI interviewed are those implicated by the lawsuit."

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The Associated Press reports the company has had an exceptional record since leaving bankruptcy protection in 2009 with 75 straight months of year-over-year sales increases. And as NPR's Sonari Glinton adds for our Newscast unit, car sales are a crucial measure for determining an auto manufacturer's operation:

"Every month the car companies report on their sales. The numbers are important for almost everything. They affect the stock price, government regulations, union issues."

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