CHICAGO -- Former Delphi Corp. CEO J.T. Battenberg III must pay a $215,000 penalty for violating U.S. securities laws by misrepresenting a $237 million payment to General Motors Co., a U.S. judge ruled.
U.S. District Judge Avern Cohn in Detroit Tuesday entered that judgment against Battenberg and a $118,500 sanction against former top Delphi accountant Paul Free.
A Detroit jury in January found the men misrepresented the GM payment and found Free committed wrong-doing in three other transactions in 2000 and 2001. The U.S. Securities and Exchange Commission sued the men in 2006.
While the jury found the men had misrepresented the GM payment, it cleared the men of claims they committed fraud or helped Delphi violate securities laws in the transaction. "The remedies are for the court to decide," Cohn said in separate memoranda explaining his rationale for each assessment.
Once the biggest U.S. auto-parts supplier, Delphi filed for bankruptcy protection after failing to win wage cuts and financial assistance from its former corporate parent, GM. Delphi emerged from bankruptcy court protection in 2009.
Attorneys for the Battenberg and Free said during trial there was no attempt to mislead investors and their clients didn't commit fraud. The jury agreed there had been no fraud. Battenberg's lawyer, William Jeffress and Free's lawyer, Matthew Lund, didn't immediately reply to a requests for comments e-mailed after hours.
Delphi ranks No. 12 on the Automotive News Europe list of the top 100 global suppliers with worldwide sales to automakers of $13.8 billion in 2010. Europe accounted for 43 percent of that total.