Michigan-based car parts manufacturer BorgWarner has agreed to pay $950,000 as part of a settlement with the Securities and Exchange Commission (SEC) for allegedly failing to calculate and report $700 million in future asbestos liability claims.

BorgWarner was found by the SEC to have misstated its financial statements from 2012 to 2016 “by failing to account for certain asbestos liabilities,” the agency said in a press release Wednesday.

The SEC’s order finds BorgWarner violated the reporting, books and records, and internal accounting controls provisions of the federal securities laws. In addition to the fine, BorgWarner agreed to cease and desist from future violations of these provisions, the SEC said. The company neither admitted nor denied the SEC’s findings.

BorgWarner manufactured clutch pads that contained asbestos and had insurance coverage to cover asbestos claims related to those products through 2004. After 2004, the company was responsible for assessing the liability itself, the SEC said.

The company, however, concluded “that there was no way to accurately estimate how many people had been exposed to BorgWarner products, the incidence of illness, or the life expectancies of exposed individuals,” the SEC said in its order. “BorgWarner also concluded that because its asbestos-containing clutch pads were normally sealed inside a clutch housing, BorgWarner’s position was unique among asbestos defendants, rendering industry benchmarks inapplicable for estimating BorgWarner’s Incurred But Not Reported (IBNR) asbestos liability.”

“These conclusions were based on high-level assumptions that were not subject to substantive quantitative analysis, actuarial assessment, or other testing,” the SEC said. The company made these assumptions “despite possessing nearly 40 years of historical raw claims data,” the SEC said.

In 2016, BorgWarner hired an actuary with asbestos claims expertise, who concluded after studying the issue that the company did have a significant asbestos liability.

In the fourth quarter of 2016, BorgWarner recorded a pre-tax $703.6 million charge for its IBNR liability and identified the charge as being the result of a change in estimate. The change was for periods dating back to 2012.

“BorgWarner reported that its failure to record the IBNR estimate was due to a material weakness in the Company’s internal controls over financial reporting,” the SEC wrote in its order.

“Companies cannot claim an inability to reasonably estimate liabilities when the data they need to do so is available,” stated Carolyn Welshhans, the SEC’s associate director in the Division of Enforcement. “BorgWarner relied on untested assumptions surrounding its asbestos-related liabilities, which ultimately led to its materially misstated financial statements.”

BorgWarner offers a broad range of “exhaust gas recirculation solutions for gasoline and diesel applications in the light- and commercial-vehicle markets,” as well as parts for electric vehicles, according to its Website. The company did not respond to a request for comment.