Toyota Motor Corp. was accused by U.S. investors of violating securities law by failing to disclose acceleration-related defects that it knew about, according to a consolidated complaint in a class-action lawsuit.
The shareholders, led by the Maryland State Retirement and Pension System, said in the Oct. 4 filing in federal court in Los Angeles that internal documents show Toyota deliberately concealed unintended sudden acceleration problems in the U.S. They said the company knew about the defects as early as 2000 and “stonewalled” regulators to avoid recalls.
“As government regulators and the media began to focus on this serious safety problem in the Toyota vehicles, defendants initially denied that any unintended acceleration problem existed, despite a plethora of internal evidence to the contrary, and instead blamed driver error and media-induced publicity,” the investors said.
Toyota’s recalls related to sudden acceleration defects have erased $30 billion in market capitalization, the investors said. The Maryland pension fund seeks to represent investors who bought Toyota’s American depositary receipts from May 10, 2005, to Feb. 2, 2010.
The fund also wants to represent investors who bought the carmaker’s common stock in domestic transactions during that period as well as, through claims made under Japanese law, all investors who bought the common stock during that time, according to the complaint.
U.S. District Judge Dale Fischer, who is overseeing the case, said in July that a U.S. Supreme Court decision may exclude securities-law claims by investors in Toyota’s common stock.
Gerald Silk, a lawyer for the Maryland fund, said in August that the decision as to which claims will be allowed to proceed will be made through a motion to seek class certification or a motion to dismiss the complaint.
“Toyota believes that the claims contained in the recently filed shareholder securities consolidated complaint are unfounded,” Celeste Migliore, a spokeswoman for Toyota Motor Sales USA in Torrance, California, said yesterday in an e-mailed statement. “We look forward to presenting our position to the court.”
The case is In re Toyota Motor Corp. Securities Litigation, 10-00922, U.S. District Court, Central District of California (Los Angeles.)