SEC Takes a Whack at Volkswagen and other Parties on Dieselgate Scandal
Posted on 03/15/2019
On March 14, 2019, the Securities and Exchange Commission (SEC) filed a complaint in the U.S. District Court for the Northern District of California charging Volkswagen AG, two of its subsidiaries, and its former CEO, Martin Winterkorn. The charges are for defrauding U.S. investors, raising billions of dollars through the corporate bond and fixed income markets while making a series of deceptive claims about the environmental impact of the company’s “clean diesel” fleet. The two subsidiaries being charged are Volkswagen Group of America Finance, LLC and VW Credit, Inc.
According to the SEC press release, “According to the SEC’s complaint, from April 2014 to May 2015, Volkswagen issued more than $13 billion in bonds and asset-backed securities in the U.S. markets at a time when senior executives knew that more than 500,000 vehicles in the United States grossly exceeded legal vehicle emissions limits, exposing the company to massive financial and reputational harm. The complaint alleges that Volkswagen made false and misleading statements to investors and underwriters about vehicle quality, environmental compliance, and VW’s financial standing. By concealing the emissions scheme, Volkswagen reaped hundreds of millions of dollars in benefit by issuing the securities at more attractive rates for the company, according to the complaint.”