The Strategist

SEC accuses Volkswagen of a major fraud

03/15/2019 - 14:05

The Securities Commission claims that the automaker was misleading investors.

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Committing a serious economic crime and repeatedly lying to investors. This is the accusation that was filed against the Volkswagen Securities and Exchange Commission (SEC) and is related to actions of the company during the scandal with a fake engine test results, the so-called Dieselgate.

The watchdog is suing Volkswagen and its former CEO Martin Winterkorn. The lawsuit is aimed at prohibiting Winterkorn from fulfilling the duties of Head or Director of a public American company and forcing him to compensate for “dishonestly received revenues”. Winterkorn was accused by American prosecutors in 2018 of conspiring to conceal the fraudulent actions of the German automaker.

The auto giant’s leaders are accused of selling shares and bonds worth $ 13 billion, knowing that half a million diesel cars are grossly violating emission standards.

“Hiding the emission scheme, Volkswagen received hundreds of millions of dollars in profit by issuing securities at more attractive rates for the company,” the SEC said.

Volkswagen considers the charges incorrect with respect to law and facts.

“The SEC complaint is a mistake, and Volkswagen will actively challenge it. The SEC filed an unprecedented complaint about securities sold only to experienced investors who did not suffer and received all interest payments and principal amount in full and on time. The SEC does not require anyone involved in the bond issue to know that Volkswagen diesel cars did not comply with US emission regulations when these securities were sold, but simply repeated unsubstantiated statements about the former general director of Volkswagen AG, who did not participate sales. Unfortunately, more than two years after Volkswagen began paying billions in fines as agreed with the US Department of Justice, the SEC is making efforts to try to extract more from the company,” the automaker commented to CNBC.

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