Industry News
GM receives subpoenas over supplier transactions
3rd April 2006
The Wall Street Journal reported on 31 March that GM had recorded in an Securities & Exchange Commission (SEC) filing last week that it had received one subpoena from a US federal grand jury investigating its handling of credit payments from suppliers, and another from the SEC concerning a previously disclosed investigation of transactions in precious-metal materials supplies.
GM's statement to the SEC also said the company had found "material weaknesses" or "significant deficiencies" in certain areas of its accounting controls. GM has reportedly received over the last six months a total of six subpoenas from the SEC and two from federal grand juries. Neither GM nor any individual GM employee have been accused of any wrongdoing in respect of the grand jury or SEC investigations, according to the Wall Street Journal, but quoted one GM bond holder, Dan Genter of RNC Genter, as saying, "Few large companies will escape SEC scrutiny at one time or another, but a federal grand jury is really perceived as several notches up from that. That really begins to erode investors' confidence in management."
GM submitted corrected financial statements on its financial years 2002-2004 and for the first three quarters of 2005.
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