Frequently Asked Questions
- What is this case about?
- Why did I receive a Notice?
- Who is eligible to participate in the BMW Fair Fund?
- Who is excluded from participating in the BMW Fair Fund?
- What is the amount of the BMW Fair Fund?
- What do I need to do to participate in the BMW Fair Fund?
- When is the deadline to file a Claim?
- What are the Eligible Securities?
- What is this case about?
On September 24, 2020, United States Securities and Exchange Commission (the “Commission”) issued the Order instituting and simultaneously settling cease-and-desist proceedings (the “Order”) against Bayerische Motoren Werke, Aktiengesellschaft (“BMW AG”), BMW of North America, LLC (“BMW NA”), and BMW US Capital, LLC (“BMW USC”) (collectively, the “Respondents”) for violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 (“Securities Act”). In the Order, the Commission found that from 2015 to 2019, BMW inflated its reported retail sales in the U.S., which helped BMW close the gap between its actual retail sales volume and internal targets and publicly maintain a leading retail sales position relative to other premium automotive companies. The Commission also found that BMW NA used three practices that had the effect of inaccurately reporting its U.S. retail sales volume (a non-financial metric). First, from January 2015 through March 2017, BMW used its demonstrator and service loaner programs to boost reported retail sales volume and meet internal targets, resulting in demonstrator and loaner vehicles accounting for over one quarter of BMW NA’s reported retail sales in this period. Second, from 2015 through 2019, BMW NA maintained an excess reserve of unreported vehicle sales—referred to internally as the “bank” —that it used when necessary to meet internal monthly sales targets without regard to when the underlying sales occurred. Finally, in January 2015 and January 2017, BMW NA improperly adjusted its retail sales reporting calendar, which usually followed a standard calendar used in the automotive industry, to achieve internal retail sales targets or bank excess retail sales for use in future reporting periods.
In addition, the Commission found that BMW AG, a German corporation and the ultimate parent company of BMW NA and BMW USC, raised approximately $18 billion through seven bond offerings on the U.S. capital markets from 2016 through 2019, which were offered and sold to investors pursuant to Rule 144A promulgated under the Securities Act. According to the Order, in connection with these bond offerings, BMW AG, through BMW USC, provided information about BMW’s U.S. retail vehicle sales to bond investors, initial purchasers, and credit rating agencies in offering memoranda and investor presentations. BMW NA also issued monthly press releases during this period regarding BMW’s U.S. retail sales. The Commission found that BMW AG provided materially incomplete and inaccurate information regarding its U.S. retail sales performance and customer demand for BMW vehicles in the U.S. market because it failed to disclose BMW NA’s practices that resulted in the inaccurate reporting of its U.S. retail sales volume. The Commission ordered the Respondents to pay an $18,000,000 civil penalty. The Commission created the Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalty paid can be distributed to harmed investors. The Respondents paid the penalty in full.
Top - Why did I receive a Notice?
You received a Notice because you may have purchased or otherwise acquired BMW USC bonds through private placement transactions during the Relevant Purchase Period (April 11, 2016, through September 24, 2020) and suffered harm as a result of the Respondents’ misrepresentations and omissions. Investors who fit these criteria may be eligible for a distribution from the Fair Fund that was established in Securities and Exchange Commission enforcement actions against the Respondents.
Top - Who is eligible to participate in the BMW Fair Fund?
Investors who are determined by the Fund Administrator to have purchased the Securities during the Relevant Purchase Period and suffered harm as a result of the Respondents’ misrepresentations and omissions, and who are not Excluded Parties, as the term is defined in the approved Plan of Distribution. You can view the approved Plan of Distribution on the "Case Documents" tab of this website.
Top - Who is excluded from participating in the BMW Fair Fund?
Excluded from the BMW Fair Fund are (a) the Respondents; (b) any current or former advisor or agent of the Respondents who participated in the conduct described in the Order; (c) any current or former employee of the Respondents or any of its affiliates who has been terminated for cause or has otherwise resigned, in connection with the conduct described in the Order; (d) any Person who served at any time from January 1, 2016 through the end of 2019 as an officer or director of the Respondents, or of any subsidiary or affiliate of Respondents; (e) any Person who, as of the Claims Bar Date, has been the subject of criminal charges related to the conduct described in the Order or any related Commission action; (f) any firm, trust, corporation, officer, or other entity in which Respondents has or had a controlling interest; (g) the Fund Administrator, its employees, and those Persons assisting the Fund Administrator in its role as the Fund Administrator; or (h) any purchaser or assignee of another Person’s right to obtain a recovery from the Fair Fund for value; provided, however, that this provision shall not be construed to exclude those Persons who obtained such a right by gift, inheritance or devise.
Top - What is the amount of the BMW Fair Fund?
The BMW Fair Fund holds approximately $18 million, composed of civil money penalty, and accrued interest.
Top - What do I need to do to participate in the BMW Fair Fund?
In order to be considered for eligibility to receive a Distribution Payment under the approved Plan of Distribution, you must return a completed Claim Form (paper or via the online portal on this website) and submit acceptable supporting documentation to support your claim, by the Claims Bar Date (deadline) of May 10, 2024, 11:59 PM, PST. Participation in the BMW Fair Fund does not require you to release any rights or potential claims you may have against the Respondent (other than with respect to the Fund Administrator), including but not limited to the Respondents’ past and present directors, officers, promoters, advisers, agents, affiliates, nominees, assigns, creditors, or controlled entities.
Top - When is the deadline to file a Claim?
All Claims must be filed by the Claims Bar Date of May 10, 2024, 11:59 PM, PST.
Top - What are the Eligible Securities?
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