SEC: BMW reports inflated sales numbers to investors

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Last week, the Securities and Exchange Commission settled charges against BMW AG and two U.S. subsidiaries for inflating U.S. retail sales while raising $18 billion in bond offerings from investors.

Reports from 2015 to 2019 show the misconstrued data helped close the gap between the actual retail sales numbers and internal targets at BMW, as well as sales carried out by competitors, according to an SEC news release.

BMW of North America is said to have kept a list of unreported retail sales called “the bank” used to fill out sagging monthly sales numbers. SEC charges also claim that BMW NA paid dealers to inaccurately designate vehicles as demonstrators or loaners and adjusted the company’s reporting calendar to boost retail numbers to meet internal goals or store these sales for future use, according to the release. These skewed numbers were then reported to BMW’s investors through BMW US Capital LLC.

“Companies accessing U.S. markets to raise capital have an obligation to provide accurate information to investors,” Stephanie Avakian, director of the enforcement division of the SEC, said in the release. “Through its repeated disclosure failures, BMW misled investors about its U.S. retail sales performance and customer demand for BMW vehicles in the U.S. market while raising capital in the U.S.”

BMW and its subsidiaries neither admitted nor denied the order’s claims. The company agreed to pay a joint penalty of $18 million and to cease and desist from future violations.

“This settlement illustrates the significant benefits to companies for providing concrete cooperation that substantially advances the quality and efficiency of our investigations once contacted by agency staff,” said Anita B. Bandy, associate director of the SEC’s enforcement division. “As we continue to vigorously pursue wrongdoing during the COVID-19 pandemic, companies wishing to receive credit should be forthcoming in their approach to cooperation.”