Remember the Toyota recall fiasco of 2010? Apparently, it's not over yet -- at least not for investors. They filed a lawsuit against the automaker at the height of the crisis, and now, nearly three years later, Toyota has agreed to compensate them to the tune of $25.5 million.
According to Detroit News, the lawsuit alleges that Toyota hid problems with its vehicles, and that if investors had known about those problems, they never would've bought Toyota stock. That stock took a nose-dive during the company's high-profile recall, erasing about $30 billion in market value.
Had the lawsuit gone to court, investors might have recovered up to $124 million. The case could have also exposed more problems at Toyota, even though the company has so far refused to accept blame for the recall issues. (And in fairness, some of those "issues" turned out to be hoaxes.)
Not surprisingly, Toyota took the less expensive route: the settlement filed in U.S. District Court in Los Angeles is for a markedly more palatable sum of $25.5 million.
Those funds will be divvied up among thousands of individuals and institutions who purchased Toyota stock between May 2005 and February 2, 2010. If you're not a daytrader, you might think that the settlement doesn't affect you, but think again: hundreds of fund managers held Toyota in their portfolios. In fact, the lead plaintiff in the case was the Maryland State Retirement and Pension System, which doles out benefits to 350,000 former state workers and their families.
That said, investors who still hold Toyota stock probably shouldn't worry about this settlement putting a squeeze on their own returns. In light of Toyota's recent quarterly profits, totaling $3.2 billion, $25.5 million won't have much of an impact -- though today's new recall of 2.77 million Toyota vehicles might....