General Motors Co. (GM)’s Lawyers Under The Federal Scanner

The problems for General Motors Co. (NYSE:GM) do not seem to end anytime in near future. Federal prosecutors are inspecting about the role of employees working in the legal department of the company. The prosecutors suspect that the legal department concealed critical evidence from involved regulators leading to a delay in recall of faulty vehicles.

This is not the first of legal problems faced by General Motors Co. (NYSE:GM). Earlier in this month, Kenneth Feinberg, injury claim lawyer for GM, received over 125 claims concerning the faulty ignition switch in Cobalt and other cars offered by the company. The company ended up recalling 29 million cars throughout 2014 because of potential ignition switch problem and it has over 100 lawsuits claiming the loss of value of vehicle because of the fault.

GM

The current investigation against the legal department employees of General Motors Co. (NYSE:GM) is in its initial stage and might not even involve any charges by the end. Earlier, the company released an internal report stating that the company’s lawyers have failed in informing other managers about lawsuits filed against the company, which might have been useful n avoiding potential accidents.

Federal prosecutors are examining all the legal department employees responsible for misleading statements issued by General Motors Co. (NYSE:GM) concerning the problem of ignition switch in nearly 2.6 million cars. Both the Manhattan U.S. Attorney Office and Federal Bureau of Investigation are working together in this investigation. Even the prosecutors are finding it difficult to escape the external pressure, which holds GM executives responsible for a long chain of product defects.

The enquiry, depending upon the result, might affect the brand of the company, although the management is helping Federal Prosecutors in every way possible.

This article has been written by Prakash Pandey.

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