U.S. District Judge Avern Cohn in Detroit ordered Tuesday that J. T. Battenberg III, a former chief executive officer at Delphi Corp., has to pay $215,000 in penalty charges for violating U.S. securities laws by misrepresenting a $237 million payment to General Motors Co.
He also gave a $118,500 sanction against Paul Free, former top Delphi accountant. In January, a jury in Detroit found the men misrepresented the GM payment and found that Free committed wrong-doing in three other transactions in 2000 and 2001.
The U.S. Securities and Exchange Commission sued these executives in 2006. While the jury found that they had misrepresented the GM payment, it cleared them of claims that they committed fraud or helped Delphi violate securities laws in the transaction. In separate memoranda detailing his rationale for each assessment, Cohn explained that the remedies are for the court to decide.
Delphi, which was once the biggest vehicle components supplier in the United States, filed for bankruptcy protection after not being able to win wage cuts and financial assistance from GM, its former corporate parent. In 2009, Delphi emerged from bankruptcy court protection.
During the trial, the attorneys for Battenberg and Free asserted that there was no attempt to mislead investors. The attorneys also stated that the executives did not commit fraud, for which the jury had concurred. Battenberg's lawyer, William Jeffress and Free's lawyer, Matthew Lund, has yet to comment on this report. [source: Autonews]