WASHINGTON - Federal prosecutors have launched a criminal investigation into Toyota Motor Corp.'s safety problems, and the Securities and Exchange Commission was probing what the automaker told investors, the company disclosed Monday. Newly released internal documents showed that Toyota officials visited with U.S. regulators years ago who "laughed and rolled their eyes in disbelief" over safety claims.
The twin developments created new public relations challenges for Toyota plus the prospects of hefty federal fines or even indictments against executives in the United States and Japan. They also complicate Toyota's ability to discuss details driving its recall of 8.5 million vehicles because anything executives say could be used against the company inside a courtroom.
Top Toyota executives were expected to testify at hearings Tuesday and Wednesday on Capitol Hill. One lawmaker said he believed Toyota misled owners about the repairs and relied upon a hastily arranged study to reassure the public.
In a new filing with the SEC, Toyota said it received the grand jury request from the Southern District of New York on Feb. 8 and got the SEC requests Friday.
It wasn't immediately clear what U.S. laws Toyota might have broken. A subpoena would specify why prosecutors sought company documents, but Toyota would not comment beyond its disclosure with the SEC. A spokeswoman with the U.S. attorney's office for the Southern District of New York declined to comment, saying it does not confirm or deny its investigations.
The government could be looking into product safety law violations or whether Toyota made false statements to a federal safety agency involving unintended acceleration or the Prius braking system, said Peter Henning, a law professor at Wayne State University in Detroit. The SEC is seeking documents related to unintended acceleration as well as to its disclosure policies and practices, Toyota said. Eric Dezenhall, a crisis management consultant in Washington, said the subpoena might cause Toyota to limit its testimony because apologies are admissible in court. - AP