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US stock market daily report (March 25, 2014, Tuesday)

March 26, 2014, Wednesday, 05:32 GMT | 02:32 EST | 11:02 IST | 13:32 SGT
Contributed by Millennium Traders

A lawsuit filed by a coalition of law firms on Monday against General Motors Company (GM-NYSE), indicate the car maker not only knew that the ignition switches in 1.62 million now-recalled cars were faulty, it also knew the problem was made worse by the position of the switch, where it is easily bumped. Faulty ignition switches in the affected, recalled GM vehicles are linked to 12 deaths and 31 crashes. GM has opened its own internal investigation regarding the faulty ignition switches. Federal prosecutors and regulators have opened investigations into the delayed recall by GM and Congressional hearings are planned.

A statement in the lawsuit reads, "Since at least 2005, GM has known that simply replacing the ignition switches on the defective vehicles is not a solution for the potential for the key to inadvertently turn from the 'run' to the 'accessory/off' position in these vehicles." Further allegations in the suit is that GM knew that its key ignition system could shut off the engine without warning, as early as 2001. However, further allegations include that GM made no steps to repair the defect and sold the cars anyway. The lawsuit additionally seeks compensation for the owners for what it says is a loss in value for their cars because of the recall.

According to the lawsuit filed in U.S. District Court in San Francisco against GM, the car maker's replacement of the switches is an "insufficient" remedy, and the cars need an additional fix to shield the key or fob from being bumped by the driver.

GM cars involved in the recall for the switch issue include - 2005 to 2007 Chevrolet Cobalt and 2006 to 2007 HHR, 2006 to 2007 Pontiac Solstice and 2007 G5 and the 2003 to 2007 Saturn Ion and 2007 Sky.

Late Friday, what is believed to be the first wrongful death lawsuit against GM, was filed in Minnesota state court, on behalf of three teenage girls who were severely injured or killed during a 2006 crash involving a 2005 Chevy Cobalt, one of the models GM recalled over ignition problems.

Jim Cain, spokesman for GM said the car maker would respond to the lawsuit in due course. "Right now, our biggest focus is on getting these vehicles recalled as quickly as we can with as little inconvenience to customers as possible," Cain said.

In Wisconsin in 2006, 17 year old Megan Phillips was driving a 2005 Chevrolet Cobalt with two friends when the ignition switch moved to the “accessory” position and cut power to the car. The results - their Cobalt hit a telephone junction box and two trees, the air bags did not deploy. Phillips was seriously injured and her two passengers were killed. According to a report commissioned by the National Highway Traffic Safety Administration, investigators have documented the 2006 Wisconsin accident and identified a switch failure similar to one cited by GM in its February recalls.