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Fiat Chrysler under federal scrutiny after dealership lawsuit

The lawsuit, which alleges shady sales-reporting practices, has led to an investigation by the Department of Justice and the SEC.

Fiat Chrysler

If the claims hold water, FCA could stand to pay a whole host of fines.

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Back in January, an Illinois dealer filed a lawsuit against Fiat Chrysler Automobiles, claiming the company was pressuring dealers into writing up incorrect sales reports and generally fudging numbers. FCA dismissed the claim, saying it had no merit. It was enough to get the attention of federal regulators, however, who are now investigating the company's practices.

Both the Department of Justice and the US Securities and Exchange Commission (SEC) are looking into the company's sales practices, based on that January lawsuit from the Napleton dealership group, Reuters reports. For what it's worth, several Maserati dealers in other corners of the nation have filed a comparable lawsuit.

While FCA dismissed the lawsuit in January, claiming it to be without merit, it's singing a different tune now. "FCA confirms that it is cooperating with an SEC investigation into the reporting of vehicle unit sales to end customers in the US," the company said in a statement. "In its annual and quarterly financial statements, FCA records revenues based on shipments to dealers and customers and not on reported vehicle unit sales to end customers.

"Inquiries into similar issues were recently made by the US Department of Justice. FCA will cooperate fully with these investigations," the company said.

The January lawsuit claims that FCA offered tens of thousands of dollars in bonuses for writing up false sales reports. Automakers regularly pay out bonuses to dealers for hitting certain sales targets, and those that do hit those targets can stand to make more profit per vehicle than dealerships that do not. The Fiat Chrysler umbrella covers brands like Chrysler, Jeep, Dodge, Maserati, Fiat and Alfa Romeo.