Toyota Motor Corp. (TM:US) agreed to pay $25.5 million to settle an investor lawsuit over the company’s alleged failure to disclose information on unintended acceleration problems that caused the stock to plunge in 2010, according to court documents.
Lawyers for the shareholders led by the Maryland State Retirement and Pension System outlined the proposed settlement in a filing in federal court in Los Angeles on Nov. 13. The settlement requires the approval of U.S. District Judge Dale Fischer.
Toyota shares plunged 18 percent in the seven trading days to Feb. 1, 2010, erasing 2.55 trillion yen ($32 billion) from its market value, over recalls of vehicles relating to the acceleration problems. The investors claimed internal documents show that Toyota, Asia’s largest carmaker, deliberately hid the problems and knew about defects as early as 2000.
The carmaker has reached an agreement on the lawsuit, Joichi Tachikawa, a spokesman for Toyota, said by telephone. He declined to provide more details on the case. Toyota denied wrongdoing and liability and agreed to settle the lawsuit as further litigation could be protracted and expensive, according to the court papers.
The Toyota City, Japan-based company recalled more than 10 million vehicles for problems related to unintended acceleration from 2009 to 2010. It paid a record $48.8 million in fines to the U.S. National Highway Traffic Safety Administration for how some of the recalls were conducted.
The case is In re Toyota Motor Corp. (7203) Securities Litigation, 10-00922, U.S. District Court, Central District of California (Los Angeles).
To contact the reporter on this story: Douglas Wong in Hong Kong at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Hytha at email@example.com