Takata Corporation (OTCMKTS:TKTDY) shares are surging as the company announced that it is nearing a settlement surrounding the largest U.S. car recall ever.
The Japanese company recently found itself in hot water following an airbag scandal that led to at least 11 deaths around the world. A total of at least 100 people sustained injuries from the vehicles’ airbags failing to deploy properly.
Takata has agreed to shell out a financial penalty amounting to $1 billion. The company has also agreed to plead guilty to criminal misconduct charges following the recall.
The recall was filed with the National Highway Traffic Safety Administration, amounting to an astounding 42 million vehicles in the U.S., as well as plenty more around the world.
The issue itself was related to a flaw in the airbag deployment system that could wear out over time. If these safety precautions were faulty enough, they could explode and release hot metal shrapnel to someone in the car.
Takata may also have to accept wire fraud charges as the company reportedly hid information surrounding the flaw in its airbags that led to nearly a dozen deaths.
The Justice Department is looking to take care of this situation sometime over the coming month as a new administration will take over in January.
TKTDY shares surged 21.4% Thursday. Overall, the stock has only fallen 2.2% year-to-date thanks to a recent upswing that has helped to offset major losses early in the year.
