The Strategist

German prosecutor's office accuses Volkswagen of market manipulation

09/26/2019 - 06:45

According to the prosecutor's office, VW top managers were too late to inform the exchanges about manipulation of diesel exhaust data, and thereby affected exchange rates.

High Contrast
High Contrast
The Braunschweig prosecutor’s office sued executives of the Volkswagen automobile group, accusing them of market manipulation. Hans Dieter Pötsch, Supervisory Board Chairman, Herbert Diess, Chairman of the Board, and Martin Winterkorn, former Board Chairman, are accused of not informing investors in a timely manner about the risks associated with the diesel scandal in 2015. 

According to investigators, senior executives at Germany’s largest automaker were aware of specific manipulations of diesel exhaust data earlier than previously thought. However, contrary to their responsibilities, they deliberately did not inform the market on time about the likely multi-billion dollar payments associated with the diesel scandal that had begun.

Thus, according to the prosecutor's office, Pötsch, Diess and Winterkorn unlawfully influenced the stock exchange rate of the concern. Investors are demanding compensation from top managers for the collapse of VW shares on the stock exchange in 2015. According to them, the concern's management should have informed the financial world about the risks associated with the diesel scandal earlier.

Meanwhile, lawyers of the head of VW rejected the allegations of market manipulation. The lawsuit of the Braunschweig prosecutor’s office is completely incomprehensible, the lawyers said. The defense considers the charges unjustified.

On September 18, 2015, it became known that the US authorities initiated an investigation into the manipulation of data from exhausts of Volkswagen diesel cars. VW executives were forced to admit that software was installed on several million cars sold in the world that allowed them to manipulate tests for engine compliance with environmental standards.

The dieselgate has caused a massive recall of VW products from the US market to eliminate technical fraud. The concern has reached an agreement with the United States authorities on fines and compensation payments totaling more than $ 18 billion as part of the settlement of the scandal.