The U.S. Securities and Exchange Commission (SEC) has charged Volkswagen and former CEO Martin Winterkorn with defrauding U.S. investors during the "Dieselgate" emissions scandal of 2014.
In its charge sheet, the SEC said that between April 2014 and May 2015, Volkswagen issued more than $13 billion in bonds and asset-backed securities in U.S. markets when senior executives knew 500,000 VW vehicles in the U.S. greatly exceeded legal federal and state vehicle emissions limits.
It also charged VW with using a hidden software feature that helped the company circumvent U.S. emissions regulations covering diesel engines. The complaint claims Volkswagen made false and misleading statements to investors and underwriters.
The deception covered vehicle quality, environmental compliance, and the company's financial standing. It gave Volkswagen a financial benefit when it issued securities at more attractive rates for the company.
In the court filing, the SEC also alleges Volkswagen "perpetrated a massive fraud" and repeatedly lied to U.S. investors in connection with the diesel game scandal.
"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," the SEC said in a summary of its filing.
The SEC has also asked Volkswagen for information about potential securities law violations over certain investments the company might have sold to investors. It's looking for evidence as to whether VW failed to disclose information about vehicles that didn't comply with U.S. emissions standards when it issued some securities to investors.
As for Winterkorn, the SEC wants to bar him from serving as an officer or director of a public U.S. company. It also wants to recover "ill-gotten gains" from him. In 2018, Winterkorn was charged by U.S. prosecutors and accused of conspiring to cover up VW's diesel emissions scandal.
VW didn't take the SEC charges lying down. It criticized the SEC complaint as "legally and factually flawed" and will contest the charges vigorously.
"The SEC has brought an unprecedented complaint about securities sold only to sophisticated investors who were not harmed and received all payments of interest and principal in full and on time," claims VW.
"The SEC does not charge that any person involved in the bond issuance knew that Volkswagen diesel vehicles did not comply with U.S. 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.'
