On September 13, 2020, the Commission instituted and simultaneously settled cease-and-desist proceedings (the “Order”) against Bayerische Motoren Werke Atktiengesellschaft (“BMW AG”), BMW of North America LLC (“BMW NA”), and BMW US Capital LLC (“BMW US”) (collectively, the “Respondents”) for violating Sections 17(a)(2) and 17(a)(3) of the 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. The Respondents were ordered to cease and desist from future violations of the securities laws and ordered to pay an $18,000,000 civil penalty.  See the Commission’s Order: Release No. 33-10850.

On April 7, 2022, the Commission issued an order that established a Fair Fund (the “Fair Fund”), so the civil penalty collected can be distributed to those harmed by the Respondents’ conduct described in the Order.  See the Commission’s Order: Release No. 34-94623.

The Fair Fund is comprised of the $18 million in civil penalties paid by the Respondents, and it has been deposited in an interest-bearing account at the U.S. Department of the Treasury’s Bureau of the Fiscal Service. All accrued interest will benefit the Fair Fund.

On August 4, 2022, the Commission issued an order appointing Miller Kaplan Arase LLP, as the Tax Administrator of the Fair Fund. See the Commission’s Order: Release No. 34-95427. 

On September 14, 2022, the Commission issued an order appointing KCC LLC, as the Fund Administrator to oversee the administration and distribution of the Fair Fund and, set the administrator’s bond amount. See the Commission’s Order: Release No. 34-95766.

For more information, please contact the Commission: 

Office of Distributions
Email: ENFOfficeofDistributions@sec.gov