SEC: Former Navistar CEO Covered Up Failed Engine Technology

April 2, 2016

According to a story in Crain's Chicago Business on March 31, Daniel C. Ustain, Navistar's CEO from 2003-2012, repeatedly lied about whether the EGR emissions technology on the company's trucks met the EPA standards for  nitrogen oxide emissions that went into effect in 2010.

According to a 57-page lawsuit the Securities and Exchange Commission filed in U.S. District Court in Chicago on March 31,  "(From) 2010 through 2012, instead of coming clean with the public regarding the difficulties Navistar was experiencing in developing and certifying a competitive EGR-only engine, Ustian engaged in a cover-up."

Instead of telling investors and customers about problems certifying the company's EGR-only engine, Ustain diverted attention to competitors. The SEC lawsuit says Ustain's and Navistar's inaccurate claims regarding an upcoming EPA certification for the EGR-only engine were made during conference calls, press releases, and reports filed with the SEC.

Ustian violated securities laws, and should be subject to a wide range of penalties, according to the complaint. The SEC said Ustain violated securities laws and is seeking an unspecified amount of money and a civil penalty from him, as well as having him permanently barred from serving as a corporate officer or director.

The SEC earlier accused Navistar of deception and the company paid $7.5 million to settle.

Read more of the Crain's story here:

Source: Crain's Chicago Business