U.S. judge approves Toyota $1.2 billion settlement over concealing defects

Thu Mar 20, 2014 2:53pm EDT
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By Nate Raymond

NEW YORK (Reuters) - A U.S. judge signed off on Toyota Motor Corp's (7203.T: Quote) $1.2 billion settlement of criminal charges that it concealed safety problems in its vehicles, an accord that could serve as a model for a similar probe into General Motors Co (GM.N: Quote).

U.S. District Judge William Pauley approved the Japanese automaker's deferred prosecution agreement at a Thursday hearing in Manhattan.

His approval came one day after the U.S. Department of Justice said it resolved its investigation into problems that caused Toyota vehicles to accelerate suddenly.

Pauley said the case presented a "reprehensible picture of corporate misconduct," and expressed hope that the government would ultimately hold the responsible decisionmakers at Toyota accountable.

"This unfortunately is a case that demonstrates that corporate fraud can kill," he said.

Pauley ruled shortly after Christopher Reynolds, Toyota's North American legal chief, entered a "not guilty" plea on behalf of the automaker to one count of wire fraud.

The $1.2 billion settlement is the largest such penalty ever levied by the United States on an auto company. It resolves issues that have dogged Toyota since at least 2007 and have been linked to at least five deaths. Toyota still faces hundreds of private lawsuits.

The settlement marked a huge victory for safety advocates who fought for years for criminal prosecution of automakers over safety violations.   Continued...

Employees and a customer (C) walk in front of Toyota Motor's logo at the company's showroom in Tokyo March 12, 2014. REUTERS/Toru Hanai