SEC Charges VW And Former CEO Martin Winterkorn With Fraud

Lloyd Doyle
March 15, 2019

VW "reaped hundreds of millions of dollars in benefit by issuing the securities at more attractive rates".

The SEC's complaint, filed in the U.S. District Court for the Northern District of California, charges Volkswagen AG, its subsidiaries Volkswagen Group of America Finance, LLC and VW Credit, Inc., and Winterkorn with violating the antifraud provisions of the federal securities laws.

The statement goes on to say that the SEC "does not charge that any person involved in the bond issuance knew that Volkswagen diesel vehicles did not comply with USA emissions rules when these securities were sold", but repeats claims about Winterkorn "who played no part in the sales".

Martin Winterkorn, who resigned in 2015 as VW's chief executive when the scandal was revealed, is also named in the civil complaint, which was brought by the SEC late on Thursday.

The scandalous case that forced the company's CEO Martin Winterkorn to resign has reportedly cost the automaker €29 billion ($32.8 billion) so far.

The automaker added that 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 repeats claims about Winterkorn "who played no part in the sales".


The lawsuit alleges that VW misled investors who bought $13 billion worth of those bonds about the quality of its cars.

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

The dieselgate scandal first emerged in 2015 when VW was caught cheating on emissions tests in the US. It pleaded guilty to felony charges in 2017; 13 people have been charged in the U.S., including Winterkorn.

"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 USA emission standards", the SEC alleged.

Critics argue that VW should have informed investors on September 3, 2015 about having used a "defeat device" to cheat emissions tests, the same day that VW managers admitted to using illegal software to USA regulators. Two VW executives have been convicted in the scandal and are now serving sentences in US federal prisons.

Other reports by Iphone Fresh

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