Share price of Navistar International Corporation NAV decreased 0.6% to $12.45 on Apr 1, 2016, after the company agreed to a $7.5 million settlement with the U.S. Securities and Exchange Commission (SEC). The charge was levied by the SEC alleging that the company misled investors by claiming that it had developed an engine which could satisfy the tough federal emission standards.In addition, the SEC accused the company’s former CEO, Daniel C. Ustian for backing the violations made in 2011 and 2012. The SEC filed a lawsuit against Ustian claiming that he did not completely reveal the difficulties faced by Navistar in achieving Environmental Protection Agency certification for a truck engine that meets stricter Clean Air Act standards which came into effect from 2010.Navistar faced many challenges while developing the advanced technology truck engine. The company applied for EPA certification in 2011, but it was rejected. It reapplied in 2012. This time too there were many concerns voiced by the EPA. Navistar needed to resolve these issues for obtaining the approval. However, the company announced this application to be a milestone and said that it will commence the engine’s production from Jun 2012.The SEC stated that Navistar invested $700 million to develop exhaust gas recirculation (EGR) technology for reducing nitrous oxide emissions. However, in Jul 2012, the company abandoned the endeavor saying that it will make engines with selective catalytic reduction technology which is used by its rivals.The SEC also said that the former CEO repeatedly cheated investors via news releases, conference calls and regulatory filings leading them to believe that the company would receive EPA certification very soon though he was aware that the agency has refused to provide it. The lawsuit filed against the CEO bans him from serving as an officer or director of public companies.Navistar believes that a settlement will be beneficial for both the company and its shareholders. The settlement will also let the company avoid any further dispute with the SEC and allow it to focus on growth prospects. However, Navistar neither accepted nor denied the charges.Zacks Rank:Currently, Navistar carries a Zacks Rank #3 (Hold). Some better-ranked automobile stocks include Federal-Mogul Holdings Corporation FDML, Cooper Tire & Rubber Co. CTB and Superior Industries International, Inc. SUP. All the three stocks sport a Zacks Rank #1 (Strong Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NAVISTAR INTL (NAV): Free Stock Analysis Report SUPERIOR INDS (SUP): Free Stock Analysis Report FEDERAL MOGUL-A (FDML): Free Stock Analysis Report COOPER TIRE (CTB): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research