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Fiat Chrysler Said to Face U.S. Justice Department Probe

  • Prosecutors scrutinizing possible securities laws violations
  • Alleged sales-padding by dealers is focus of civil lawsuits

Fiat Chrysler Automobiles NV is under investigation by the U.S. Justice Department for fraud, according to people familiar with the matter.

Prosecutors are scrutinizing whether the carmaker violated U.S. securities laws, they said. The inquiry is in early stages, according to two people, who asked not to be identified because the investigation is confidential and declined to specify what conduct is being investigated.

A civil lawsuit against Fiat Chrysler may provide clues about what prosecutors are looking at. A Chicago-area dealer alleges the company inflated its U.S. car sales by paying dealers to report selling more vehicles than they actually did.

Shawn Morgan, a spokeswoman for Auburn Hills, Michigan-based Fiat Chrysler, didn’t immediately respond to a telephone and e-mail request for comment. A Justice Department spokesman declined to comment. A spokeswoman for the Securities and Exchange Commission, which typically investigates securities fraud cases along with the Justice Department, declined to comment.

Fiat Chrysler shares in the U.S. fell more than 5 percent on the news in intraday trading and as much as 3 percent since Friday’s close. It was down 1.4 percent to $6.66 at 12:23 p.m. in New York.

Record Sales

A criminal investigation could deliver a blow to the automaker, which has posted record vehicle sales since Fiat acquired full control of Chrysler in 2014 through a government-backed...