Navistar International Corp. will pay $7.5 million to settle Securities and Exchange Commission complains about the company’s claim to investors that it had developed an engine that could be certified to meet U.S. emission standards, the SEC announced Thursday.
The Lisle, Illinois-based truck-maker did not admit wrongdoing as part of the settlement.
The SEC also charged former Navistar CEO Daniel C. Ustian with misleading investors and with aiding and abetting violations by the company. In a filing in U.S. District Court in Chicago, the SEC alleged that Ustian failed to fully disclose the company’s difficulties obtaining Environmental Protection Agency certification of a truck engine able to meet stricter Clean Air Act standards that took effect in 2010.
“When public companies and top executives discuss important regulatory developments with investors, they must tell the whole truth,” said SEC director of enforcement Andrew J. Ceresney. “Here, we allege that Navistar and its former CEO misled investors about their dealings with the EPA and the likely approval of its new emissions technology.”
Navistar spokeswoman Lyndi McMillan said the company believed a settlement was in the best interests of Navistar and its stockholders.
“Settling this matter will avoid the expense and distraction of a potential dispute with the SEC and allow us to continue our focus on building and sustaining momentum on behalf of our shareholders,” McMillan said in a statement.
A telephone listing for Ustian could not be found. He stepped down as Navistar CEO in 2012.
Navistar struggled for years with development of an advanced technology truck engine. It’s first application for EPA certification was rejected in 2011. The company reapplied in 2012, and EPA staff raised “several serious concerns” it said would need to be resolved before it could approve the application.
Despite the EPA stance, Navistar issued statements characterizing the application as a “milestone.” In a conference call with analysts and investors, Ustian indicated that certification was proceeding in a typical timeframe and that Navistar could begin production on the engine in June 2012, according to the SEC.
Filed Under: Industry regulations