Fiat Chrysler shares fell more than 13% in New York on the news.
Fiat Chrysler has been accused of not telling authorities about software regulating emissions in thousands of its diesel vehicles.
The US Environmental Protection Agency (EPA) said the company broke the law by installing, but failing to disclose, the technology in more than 100,000 Jeeps and Dodge vehicles.
The EPA says the software has resulted in higher emissions of nitrogen oxides.
Fiat Chrysler shares fell more than 13% in New York on the news.
The company is also listed in Milan and its shares were suspended after falling as much as 16%.
Investors are nervous about issues over emissions. Earlier this week Volkswagen agreed to pay fines of $4.3bn after it admitted to rigging US emissions tests.
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