At the time when automakers and the industry, in general, is shutting down for the holidays, BMW has just acknowledged some potentially troubling news. The US Securities and Exchange Commission (SEC) has officially launched an investigation into BMW North America, according to a report from The Wall Street Journal. BMW has since clarified this report's accuracy. Is BMW in potential trouble here?

Yes, and here's what's happening: the SEC's investigation is about the manner in which BMW reported its US sales figures. In a practice known as "punching," BMW could have increased its apparent sales numbers by requesting dealerships to register cars as loaners, and later sell them as used with very little mileage on them. As a result, "punching" sales can help dealers in hitting company targets, resulting in automakers achieving higher sales results.

BMW says it is cooperating with the SEC. But don't think for a moment somewhat shady alleged sales methods like this are limited to BMW. Earlier this year, FCA agreed to pay a $40 million fine for its sales-reporting practices. Although it admitted to no wrongdoing, FCA had paid its dealers to report "fake sales."

The automaker also had a database of unreported sales. BMW has a history of sales punching, a practice that supposedly ended a couple of years ago. BMW has been in a sales battle with its two arch-rivals, Mercedes-Benz and Audi, not only in their home continent of Europe but also in the far more lucrative North American market.

Achieving the yearly sales crown is a big deal, especially for luxury vehicles that typically earn high profits on every unit sold. Last year in the US, BMW's best-selling model was the X3, followed by the X5. The pair represented more than two out of every five BMWs sold in the US in December 2018 alone.

The SEC has so far refused to comment on anything related to this investigation.