Toyota, Executives Hit With Investor Suit Over Safety Test Data

Toyota Motor Corp. and several of its executives misled investors by covering up the company’s car certification errors, which caused a drop in its stock price once they came to light, a proposed class action alleges.

The Japanese automaker submitted inaccurate data to Japanese regulators for protection tests on three of its current models and for crash tests for four of its discontinued models, Toyota admitted in a June 3 securities filing. Toyota also said it was halting sales of the three current models.

The company’s stock fell over 2% on the news that day, and continued to decline for the next three weeks, investors said in a lawsuit filed Monday in the US District Court for the Central District of California. The lawsuit names the company’s chief executive officer, chief financial officer, and board chairman among the defendants.

“Toyota understated its malfeasance relating to certification of its cars and issues relating to overall legal compliance,” the complaint said. “Defendants’ statements about its business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all times.”

Investors are seeking damages for losses they incurred as a result of the allegedly misleading statements and subsequent stock price drop.

Toyota couldn’t immediately be reached for comment.

The Rosen Law Firm P.A. represents the plaintiff.

The case is Abeed v. Toyota Motor Corporation et al, C.D. Cal., Docket No. 2:24-cv-05284, 6/24/24.