General Motors is accused of misleading investors about safety and financial liabilities connected to potentially life-threatening ignition switch defects that led to widespread recalls, according to a new class action complaint.
The complaint was filed Thursday, Jan. 15, in Flint U.S. District Court by The New York State Teachers’ Retirement System on behalf of anyone who purchased or acquired GM common stock between November 2010 and July 2014.
The complaint alleges GM made a series of “material misstatements and omissions” about the company’s liabilities, internal controls and commitment to customer safety.
Nearly 2.6 million vehicles have been recalled by the company after it was discovered ignition switch defects could cause the vehicles to shut down on their own, even when traveling at high speeds. The defects have been linked to at least 45 deaths.
“The shutdown occurred even at highway speed, and power brakes and power steering would no longer function, making the cars dangerously unsafe to control,” the complaint alleges.
Attorney Salvatore Graziano, of New York-based Bernstein, Litowitz, Berger & Grossman, which was appointed as the lead attorney in the case, filed Thursday’s complaint. He declined to comment on the new complaint.
The retirement system initially filed its complaint against GM in March 2014. However, Thursday’s new complaint combines allegations from other plaintiffs, including the Arkansas Teacher Retirement System and Menorah Mivtachim Insurance.
The plaintiffs allege when GM disclosed the problems with ignition switches to the government in February 2014, years after it learned of the potentially-dangerous defect, its stock price dropped more than 3 percent. The drop allegedly caused plaintiffs to lose millions of dollars, according to court records.
“GM knew of or recklessly disregarded dangerous safety defects in the ignition switches contained in millions of its cars that should have led to a recall many years earlier,” the complaint alleges.
General Motors has not yet filed a response to the complaint, but spokesman James Cain said the company would file a motion seeking to dismiss the case.