Toyota’s $1.2 billion settlement may be model for U.S. probe into GM | Reuters

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Toyota’s $1.2 billion may be model for U.S. probe GM

1 of 5. U.S. Attorney General Holder speaks at a news at the Justice Department in Washington 19, 2014.

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(Reuters) — Toyota Corp will pay a record billion to resolve a criminal into safety issues, in a that could serve as a for how U.S. authorities approach a investigation into General Co.

The settlement between the Justice and Toyota includes an admission by the manufacturer that it misled consumers about two different that caused cars to even as drivers tried to them down.

The agreement as General Motors is also investigation over its handling of an switch failure linked to a deaths. GM last month more than 1.6 million 13 years after first the issue. The payment Toyota to marks the largest such levied by the United States on an company, officials said.

My hope and expectation is that resolution will serve as a for how to approach future cases similarly situated companies, General Eric Holder a news conference.

Holder to discuss GM specifically but Preet the chief U.S. prosecutor in who joined him at the news conference, a verbal slip and referred to the against Toyota as one against GM. He corrected himself.

The Toyota marked a huge victory for advocates who fought for years for prosecution of automakers over violations.

Although no individuals at were charged, the case was the federal criminal case of its since the passage of the first auto safety law 48 years

It means at the highest levels of the company, they have to about going to jail if don’t report a defect, Joan Claybrook, a former of the nonprofit Public Citizen who stricter safety standards.

North American legal Christopher Reynolds said in a that the settlement serves to put an chapter behind the company.

EFFECTIVELY ON PROBATION

The Toyota resolves issues that dogged the company since at 2007 and have been to at least five deaths. The still faces hundreds of lawsuits.

Prosecutors agreed to and drop the criminal charges Toyota if it abides by terms, allowing an independent monitor to the company’s safety practices.

The who will be approved by the U.S. but paid for by the company, will be to interview executives, take in some meetings on safety and will have a toll-free for Toyota employees to anonymously violations.

The automaker must defects to regulators within days of determining the problems affect safety.

Toyota is on probation for three years, Bharara, whose office the investigation. It cared more savings than safety and about its own brand and bottom than the truth.

John James, a governance professor at University in New York, said provisions in the Toyota deal serve as a blueprint used by in any deal with GM. The Department of enforcement division is all lawyers, and live on precedents, he said.

The U.S. Attorney’s office in is investigating GM’s handling of its recall. GM faces probes by and safety regulators at the National Traffic Safety Administration, as as lawsuits from GM drivers who say cars lost value of the defects.

GM Chief Executive Barra has been credited for quickly for the slow recall and to focus on safety. Toyota had down the problems.

However, GM is under fire for failing to the defective switches when were discovered.

A GM spokesman to comment on whether the Toyota could be a model for his company.

GM have described accidents back to the mid-2000s in which spontaneously shut off, cars careening and disabling before the vehicles crashed. drivers, by comparison, found in vehicles cruising to speeds than 100 miles per hour the brake pedals were disabled.

The 1966 Motor Safety Act first required of cars and trucks to notify the of safety problems and to act if they a defect.

Congress has amended the law several but did not add criminal penalties until and even then it was assumed a case would be difficult.

To Toyota, the Justice Department around those requirements by its case under a wire law that they use in cases securities fraud to political

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A document prosecutors filed in District Court in Manhattan Toyota defrauded U.S. into purchasing its products by information and making misleading about unintended acceleration.

said federal prosecutors in New have been appropriately in crafting these mechanisms can be used in similar kinds of to hold companies responsible for actions.

Toyota said it take a $1.2 billion charge for the settlement in the fiscal ending March 31.

Toyota said customers have on. It’s good to get this us, but we don’t hear about at all from consumers, said Swope, a Toyota dealer in

‘LIES REPEATEDLY TOLD’

The resolves a four-year investigation by authorities, led by the New York FBI, conducted more than 70

Federal regulators opened the inquiry into Toyota reports of unintended acceleration by the ES350 model.

The problems public attention two years when a highway patrolman and his were killed in an accident in San that involved that of Lexus.

A 911 emergency call the family’s last minutes: in a Lexus. and we’re going on 125 and our accelerator is stuck. there’s no hold on and pray. The call with the sound of it crashing, said.

Toyota responded a recall of millions of vehicles but on the road some vehicles the top-selling Corolla which was within the company as having the worst problems with mats that trapped pedals.

The company also from the public and regulators a problem with the acceleration itself.

In fact, the company a design change to address the in the wake of the San Diego accident.

Someone will go to jail if are repeatedly told. I can’t this, one Toyota employee after a meeting with according to a statement of facts with the settlement.

That employee’s comments after he reviewed reports Europe showing the severity of the

(Reporting by David Ingram, Edwards and Aruna Viswanatha in and Ben Klayman in Detroit, additional by Emily Flitter; Editing by Chiacu. Bernadette Baum and Henderson )

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