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U.S. weighing criminal charges against GM over ignition switch recall

Mary BarraMary Barra
Mary Barra, General Motors CEO.Photograph by Carlos Osorio — AP

Federal prosecutors are weighing criminal wire fraud charges against General Motors (GM) over the company’s failure to recall vehicles equipped with faulty ignition switches, the Wall Street Journal reported Tuesday.

Citing people familiar with the matter, the newspaper said U.S. prosecutors in New York are considering other possible charges and have not made a final decision. Authorities hope to reach a settlement with the automaker by the end of summer or early fall, it reported.

Reuters could not immediately confirm the report, and representatives for the U.S. Department of Justice and General Motors could not be reached for comment.

GM’s CEO Mary Barra declined to comment on the report. She said GM had “cooperated fully” with prosecutors. Any settlement would be “on their timeline,” Barra added ahead of the company’s shareholder meeting, which is taking place Tuesday in Detroit.

Barra also addressed a report Tuesday that said Fiat Chrysler Automobiles’ Chief Executive Officer Sergio Marchionne is reaching out to hedge funds and activist investors to help persuade GM to agree to a merger.

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Barra said the proposal was “vetted” by GM’s board. She added that GM is focused on its own business plan and that decision is supported by the board.

According to the Wall Street Journal, prosecutors have determined that the company likely hid information about the switches and made misleading statements, leading authorities to zero in on the wire fraud charges.

It was the latest potential legal problem for the nation’s No. 1 automaker as it continues to grapple with the fallout from the deadly ignition-switch defect in its vehicles that has led to more than 100 deaths and 2.6 million recalls.

Detroit-based GM is already facing various legal action over the defect, although a U.S. judge in April ruled the company could be shielded from some lawsuits.

It also faces more than 4,300 claims for compensation from people who said they suffered injuries related to the faulty switches or from relatives of those killed in related accidents, the lawyer overseeing the program has said.