GM Gets SEC Subpoena
The Street.com Staff
October 25, 2005
The Securities and Exchange Commission is investigating General Motors' (GM:NYSE) handling of retirement benefits and its relationship with bankrupt parts supplier Delphi (DPHIQ:OTC), the automaker said in a government filing.
GM, which posted a $1.3 billion third-quarter loss last week because of spiraling labor costs, confirmed it has received a subpoena from the agency and is cooperating with the probe. "These matters include GM's financial reporting concerning pension and other post-employment benefits, certain transactions between General Motors and Delphi, GM's recovery of recall costs from suppliers and supplier price reductions or credits, and any obligation GM may have to fund pension and OPEB costs in connection with Delphi's proceedings under Chapter 11," the company in an SEC filing.
The company didn't elaborate on the probe.
In a separate matter, GM said the SEC and a federal grand jury have subpoenaed its finance subsidiary, GMAC, in connection with the ongoing investigation of insurance industry practices. The requests pertain to "loss-mitigation insurance products such as finite risk insurance."
Such policies have been the subject of an extensive state and federal probe that has touched companies including American International Group (AIG:NYSE) and Berkshire Hathaway (BRKA:NYSE). In general, regulators have sought information on the economic rationale for corporate coverage that has occasionally been used to burnish financial statements.
GM's stock closed at $29.17 Wednesday.