Volkswagen sued in US over diesel cheating
Volkswagen and its former chief executive have been sued by the US Securities and Exchange Commission over claims they failed to disclose to investors that diesel vehicles violated emission standards.
It is the latest twist in a software cheating scandal that has cost the company $30bn (€26.4bn).
The German carmaker sold billions of dollars of corporate bonds and asset-backed securities in the US, from 2010 to 2015, while concealing its emissions-cheating scheme, according to the complaint filed by the regulator in San Francisco’s federal court.
The case, also filed against ex-CEO Martin Winterkorn, could give fresh impetus to similar efforts for redress from European investors.
“The investors did not know that VW was lying to consumers to fool them into buying its ‘clean diesel’ cars and lying to government authorities, in order to sell cars in the US that did not comply with US emission standards,” the SEC alleged.
VW said the SEC complaint is “legally and factually flawed” and the company will “contest it vigorously.”
It accused the Commission of “piling on to try to extract more from the company”, more than two years after settlements with the Justice Department.
“The SEC has brought an unprecedented complaint over securities sold only to sophisticated investors, who were not harmed and received all payments of interest, and principal, in full and on time,” spokesman Christopher Hauss said.
“The SEC does not charge that any person involved in the bond issuance knew that Volkswagen diesel vehicles did not comply with US emissions rules, when these securities were sold, but simply repeats unproven claims about Volkswagen’s former CEO, who played no part in the sales,” he added.
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 crisis involved as many as 11m diesel cars worldwide and has cost the Wolfsburg-based company €28bn.
A court in the German city of Braunschweig is assessing a group action, covering suits brought by thousands of investors with claims totaling more than €9bn. It has scheduled the next hearing for March 25.
German prosecutors are also carrying out a criminal investigation into whether current chief executive, Herbert Diess, chairman, Hans Dieter Poetsch, and Mr Winterkorn informed investors too late about VW’s diesel breaches and their potential impact.
Bloomberg
