General Motors Corp. and its auditor, Deloitte have reluctantly agreed to pay $303 million to settle claims that the automaker lied to investors about its finances.

The settlement seeks closure on a two-year-old class-action lawsuit which claimed that GM lied about its revenue, earnings and cash flow, artificially inflating its stock price and debt securities. Under the deal announced last week, GM will pay $277 million to investors, whiile Deloitte & Touche LLP, would cough up $26 million.

This is a massive settlement. $303 million is not that far off from the $326 million GM is investing in the Michigan plant to build the much-touted, battery-powered Chevy Volt that will supposedly save the company from going down the toilet. Still, a large part of that will paid by GM's insurance.

Both the company and auditor have been dragged kicking and screaming to the settlement with Deloitte telling Associated Press it had strong defenses to these claims.

Yeah right! Let's not forget that Deloitte has form on this. This is the same firm that last year agreed to pay $149 million to settle allegations that it aided and abetted fraud at Parmalat and that agreed to pay $38.25 to settle a $325 million class action settlement of investor claims of misconduct by Delphi, the biggest auto parts supplier in the US.

Given the state of the US economy and the problems facing the US auto industry, this was the only solution. The alternative of letting it drag on for years would have been disastrous.