SEC charges Volkswagen, former CEO, with defrauding investors during emissions scandal

  • SEC charges Volkswagen, former CEO, with defrauding investors during emissions scandal

SEC charges Volkswagen, former CEO, with defrauding investors during emissions scandal

United States authorities have taken legal action against Volkswagen and its former chief executive, Martin Winterkorn, over the German vehicle maker's diesel emissions scandal, accusing the company of perpetrating a "massive fraud" on USA investors.

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 U.S. were employing illegal software in order to fool emissions tests.

The SEC filed a civil complaint in San Francisco late on Thursday that covers the period from April 2014 to May 2015.

In 2016 the Justice Department sued Volkswagen over the emissions-cheating software and the Federal Trade Commission sued the company, saying it made false claims in commercials promoting its "Clean Diesel" vehicles as environmentally friendly. The SEC is now seeking permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties, while also seeking an officer and director bar against Winterkorn.

Winterkorn, who resigned days after the scandal became public in September 2015, was charged by U.S. prosecutors in 2018 and accused of conspiring to cover up the German automaker's diesel emissions cheating.

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

Volkswagen did not immediately respond Friday to requests for comment from The Associated Press, but told the German dpa news agency that the SEC is simply repeating unsubstantiated claims against Winterkorn, who was not involved in any sales of bonds.

The dieselgate scandal first emerged in 2015 when VW was caught cheating on emissions tests in the US.

"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 simply repeats unproven claims about Volkswagen AG's former CEO, who played no part in the sales". That figure included $4.3 billion in USA criminal and civil fines. This cost VW billions of dollars in lawsuits and settlements, and the company was forced to recall millions of vehicles. It pleaded guilty to felony charges in 2017; 13 people have been charged in the U.S., including Winterkorn.

The SEC suit also names VW's VW Credit and Volkswagen Group of America Finance LLC, the entity used to sell the securities.