SEC sues VW, ex-CEO over emissions scandal

15 March, 2019, 23:28 | Author: Regina Silva
  • 2013 Volkswagen Passat TDI

The United States Securities and Exchange Commission (SEC) has sued Volkswagen and its former chief executive Martin Winterkorn, claiming it defrauded investors in relation to its handling of the Dieselgate scandal.

At issue: upwards of $13 billion in bonds and asset-backed securities issued here between April 2014 to May 2015-a period when, the SEC's lawsuit alleges, Volkswagen's upper echelons were well aware that its 500,000 diesel vehicles in the United States were employing illegal software in order to fool emissions tests.

In a statement, VW said it will contest the action, which it described as unprecedented and legally and factually flawed.

A court in the German city of Braunschweig is now assessing a group action covering suits brought by thousands of investors with claims totaling more than 9 billion euros.

VW did not immediately respond to a call for comment at the time of publication.

The diesel emissions scandal is reported to have already cost VW more than $30 billion, and the company has since shifted its focus to developing electric cars, where the company has invested as much as $50 billion to make the transition to EVs as it attempts to put the diesel scandal in its rearview mirror.

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The latest suit is seeking to ban the former VW chief from serving as an officer or director of a public USA company and recover "ill-gotten gains" along with civil penalties and interest.

Winterkorn, who resigned days after the scandal became public in September 2015, was charged by US prosecutors in 2018 and accused of conspiring to cover up the German automaker's diesel emissions cheating. That figure included $4.3 billion in USA criminal and civil fines.

Allegations that VW wrongfully withheld information about the emission software used in its diesel cars have loomed over the company since the scandal first broke in 2015.

The regulator said that from 2007 until 2015, VW carried out a "massive fraud" when selling securities and half a million cars it described as clean diesel, when executives knew about the extent of the cheating, the SEC alleged.

VW's management had sought to strike a deal with US regulators behind closed doors, a process that would lead costs to be "controllable overall with a view to the business activities of Volkswagen Group", a VW document showed.

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