UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934 

Release No. 95766 / September 14, 2022

ADMINISTRATIVE PROCEEDING

File No. 3-20060

In the Matter of

BAYERISCHE MOTOREN WERKE 

AKTIENGESELLCHAFT, BMW OF

NORTH AMERICA, LLC, and BMW 

US CAPITAL, LLC , 

Respondents.

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ORDER APPOINTING 

FUND ADMINISTRATOR AND 

SETTING ADMINISTRATOR’S 

BOND AMOUNT

On September 24, 2020, the Commission issued a settled cease-and-desist order (the 

“Order”)1against Bayerische Motoren Werke Aktiengesellschaft (“BMW AG”), BMW of North 

America, LLC (“BMW NA”), and BMW US Capital, LLC (“BMW US”) (collectively, the 

“Respondents”) for violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 

("Securities Act"). In the Order, the Commission found that from 2015 to 2019, BMW inflated 

its reported retail sales in the U.S., which helped BMW close the gap between its actual retail 

sales volume and internal targets and publicly maintain a leading retail sales position relative to 

other premium automotive companies. The Commission also found that BMW NA used three 

practices that had the effect of inaccurately reporting its U.S. retail sales volume (a non-financial 

metric). First, from January 2015 through March 2017, BMW used its demonstrator and service 

loaner programs to boost reported retail sales volume and meet internal targets, resulting in 

 

1

 See Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, Making 

Findings, and Imposing a Cease-and-Desist Order, Securities Act Rel. No. 10850 (Sept. 24, 2020).
2

demonstrator and loaner vehicles accounting for over one quarter of BMW NA’s reported retail 

sales in this period. Second, from 2015 through 2019, BMW NA maintained an excess reserve 

of unreported vehicle sales—referred to internally as the “bank” that it used when necessary to 

meet internal monthly sales targets without regard to when the underlying sales occurred. 

Finally, in January 2015 and January 2017, BMW NA improperly adjusted its retail sales 

reporting calendar, which usually followed a standard calendar used in the automotive industry, 

to achieve internal retail sales targets or bank excess retail sales for use in future reporting 

periods. 

In addition, the Commission found that BMW AG, a German corporation and the 

ultimate parent company of BMW NA and BMW USC, raised approximately $18 billion through 

seven bond offerings on the U.S. capital markets from 2016 through 2019, which were offered 

and sold to investors pursuant to Rule 144A promulgated under the Securities Act. According to 

the Order, in connection with these bond offerings, BMW AG, through BMW USC, provided 

information about BMW’s U.S. retail vehicle sales to bond investors, initial purchasers, and 

credit rating agencies in offering memoranda and investor presentations. BMW NA also issued 

monthly press releases during this period regarding BMW’s U.S. retail sales. The Commission 

found that BMW AG provided materially incomplete and inaccurate information regarding its 

U.S. retail sales performance and customer demand for BMW vehicles in the U.S. market 

because it failed to disclose BMW NA’s practices that resulted in the inaccurate reporting of its 

U.S. retail sales volume.

The Respondents were ordered to cease and desist from future violations of the securities 

laws and ordered to pay an $18,000,000 civil penalty. The Commission ordered the funds paid 
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pursuant to the Order be held in an account at the United States Treasury pending a decision 

whether the Commission, in its discretion, would seek to distribute funds.

On April 7, 2022, the Commission issued an order2that created a Fair Fund, pursuant to 

Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalty paid can be distributed to 

harmed investors (the “Fair Fund”).

The Fair Fund consists of the $18,000,000.00 paid by the Respondents. The Fair Fund 

has been deposited in an interest-bearing account at the U.S. Department of the Treasury’s 

Bureau of the Fiscal Service, and any accrued interest will be for the benefit of the Fair Fund. 

The Division of Enforcement now seeks the appointment of Kurtzman Carson 

Consultants, LLC (“KCC”) as the fund administrator and requests that the administrator’s bond 

be set at $18,000,000.00. KCC is included in the Commission’s approved pool of 

administrators.

Accordingly, IT IS HEREBY ORDERED that KCC is appointed as the fund 

administrator, pursuant to Rule 1105(a) of the Commission’s Rules on Fair Fund and 

Disgorgement Plans (“Commission’s Rules”),3and shall obtain a bond in accordance with Rule 

1105(c) of the Commission’s Rules,4in the amount of $18,000,000.00.

For the Commission, by the Division of Enforcement, pursuant to delegated authority.5

Vanessa A. Countryman

Secretary 

 

2

 See Order Establishing a Fair Fund, Exchange Act Rel. No. 94623 (Apr.7, 2022).

3

 17 C.F.R. § 201.1105(a).

4

 17 C.F.R. § 201.1105(c).

5

 17 C.F.R. § 200.30-4(a)(17).