Heavy Duty Trucking Logo
MenuMENU
SearchSEARCH

Judge Rules SEC Suit Against Former Navistar Exec Can Proceed

Daniel C. Ustian, former chairman and CEO of Navistar International, had promoted a unique diesel exhaust emissions solution. But the Securities and Exchange Commission has charged in a suit that he knew it couldn’t work, with subsequent losses to company investors.

Tom Berg
Tom BergFormer Senior Contributing Editor
Read Tom's Posts
January 27, 2017
Judge Rules SEC Suit Against Former Navistar Exec Can Proceed

Navistar's Advanced EGR diesels couldn't meet EPA exhaust limits, but Chairman and CEO Dan Ustian promoted the products anyway, the SEC has charged. Photo: Tom Berg

2 min to read


The federal government’s securities fraud suit against Daniel C. Ustian, former chairman and CEO of Navistar International, can proceed in spite of objections raised by Ustian’s attorneys, a federal judge has ruled.

Ad Loading...

Ustian had promoted a unique diesel exhaust emissions solution. But the Securities and Exchange Commission has charged in its suit that he knew it couldn’t work, with subsequent losses to company investors.

Ad Loading...

Federal Judge Sara Ellis, of the Northern District of Illinios, made the ruling earlier this week, reported the Springfield (Ohio) News-Sun.

“Because the SEC sufficiently alleges that Ustian’s statements were misleading and material to the investing public and that Ustian knew this, the SEC sufficiently states a claim for securities fraud,” wrote Judge Ellis. “The SEC also sufficiently alleges that Navistar violated the securities laws and that Ustian is liable for Navistar’s violations.”

Navistar's Advanced EGR diesels couldn't meet EPA exhaust limits, but Chairman and CEO Dan Ustian promoted the products anyway, the SEC has charged. Photo: Tom Berg

From late 2009 and for several years after, Ustian said an approach called Advanced-EGR (exhaust-gas recirculation) would meet federal Environmental Protection Agency standards. But the SEC says continued testing by Navistar engineers showed it wouldn’t work. Meanwhile, Ustian led a marketing assault on competitors who used selective catalytic reduction, the exhaust aftertreatment requiring urea (diesel exhaust fluid) injection, as inconvenient and expensive.

Navistar investors revolted when serious problems with A-EGR became known, customers complained, sales sagged, expensive warranty claims caused losses for the company, and stock value fell. Ustian was dismissed in August 2012, and last year Navistar paid a $7.5-million fine to the government for violating emissions rules.

Judge Ellis further wrote that: “The United States Securities and Exchange Commission alleges that Defendant Daniel C. Ustian, Navistar’s former CEO and president, was so driven by a desire to produce an engine that the EPA would approve and customers would buy, he engaged in securities fraud and misled investors to think that Navistar had such an engine despite knowing that Navistar could not produce an engine that could satisfy both the EPA and Navistar’s customers ….”

Ad Loading...

However, Ellis also ruled that the SEC didn’t sufficiently support allegations that Ustian is liable for statements to investors in 2012 at an analyst conference call, and so cannot proceed on those claims.

The SEC suit does not address financial losses suffered by truck owners due to the A-EGR diesels’ lack of reliability. Navistar diesels now are equipped with SCR equipment supplied by Cummins, and Cummins diesels are popular options.

Navistar continues to work to reduce losses and regain sales. In September, it was announced that Volkswagen Truck & Bus is taking a 16.6% equity stake in Navistar International Corp. as part of a “wide-ranging strategic alliance” that will initially focus on providing powertrains for Navistar trucks starting in 2019.

More Fleet Management

Illustration showing generic graphs and stylized trucking fleet
Fleet Managementby StaffMarch 24, 2026

ACT: Trucking Volumes Rise, Capacity Tightens as Fuel Prices Cloud Outlook

ACT Research data shows volumes hitting a four-year high and supply-demand balance strengthening, but higher oil prices are undercutting tariff relief and tempering optimism.

Read More →
People looking at Wabash display at TMC
Fleet Managementby News/Media ReleaseMarch 23, 2026

Wabash Teams Physical Security With Digital Tech For Better Cargo Visibility

The patent-pending cargo solution integrates a digitally connected cargo door and an intelligent locking system with the TrailerHawk.AI technology platform.

Read More →
Cyberstop column header depicting images related to cybersecurity and rising oil prices
Fleet Managementby Ben WilkensMarch 20, 2026

From Diesel Prices to Cyberattacks: How the Iran War Is Affecting Trucking

The impact of the Iran conflict extends beyond fuel costs, bringing more fraud and cybersecurity risks to the trucking industry.

Read More →
Ad Loading...
ATA President Chris Spear.
Fleet Managementby Jack RobertsMarch 17, 2026

ATA’s Spear Warns Fuel Prices, Trade Policy, and Global Conflict Could Stall Trucking Recovery

Speaking at the TMC Annual Meeting in Nashville, ATA President Chris Spear said trucking faces mounting pressure from rising fuel prices, geopolitical instability, and uncertainty around trade policy.

Read More →
Illustration of author headshot with black-and-white old-fashioned rig in the background

New Entrants, Chameleon Carriers, and Safety: Is It Too Easy to Start a Trucking Company?

More than 100,000 new trucking companies enter the industry each year, but regulators manage to audit only a fraction of them. That churn creates opportunities for inexperienced startups — and for “chameleon carriers” that shut down after safety violations and reappear under new identities. Read more from Deborah Lockridge in this commentary.

Read More →
Panel discussion
Fleet Managementby Deborah LockridgeMarch 12, 2026

Fleet Managers Invited to Apply for Exclusive HDT Exchange Event

HDTX is an intimate event that connects heavy-duty trucking fleet managers with industry suppliers through small-group discussions, educational sessions, and structured one-on-one meetings.

Read More →
Ad Loading...
DAT iPhone Widget.
Fleet Managementby News/Media ReleaseMarch 12, 2026

DAT Launches iPhone Widget to Help Owner-Operators Find Loads Faster

New DAT One feature shows top-paying loads directly on an iPhone’s home screen, helping carriers react faster to spot-market opportunities.

Read More →
Optimal Dynamics Scale screen shot
Fleet Managementby News/Media ReleaseMarch 12, 2026

Optimal Dynamics Launches AI System to Help Carriers Choose Better Freight

Optimal Dynamics says its new Scale platform uses AI agents and optimization to help carriers find and secure freight that improves network balance and profitability.

Read More →
DAT March 2026 trucking conditions.
Fleet Managementby Jack RobertsMarch 12, 2026

DAT: Flatbed Demand Climbs as Van and Reefer Rates Soften

DAT Freight & Analytics data shows tightening flatbed capacity, easing produce markets, and softening van and reefer rates.

Read More →
Ad Loading...
YouTube thumbnail with Mike Roeth of NACFE saying "NACFE's Messy Middle: Which Fuel Wins?"
Fuel Smartsby Deborah LockridgeMarch 11, 2026

Run on Less “Messy Middle” Data Shows Multiple Paths Forward for Truck Powertrains [Watch]

NACFE's Run on Less - Messy Middle project demonstrates the power of data in helping to guide the future of alternative fuels and powertrains for heavy-duty trucks.

Read More →