United States Regulators Sue Volkswagen And Its Ex CEO Martin Winterkorn For Dieselgate Scandal

Business

The United States Securities and Exchange Commission has launched a civil action lawsuit against the global Germany-based carmaker Volkswagen. The SEC intends to add to the $25 billion bill the carmarker is already facing due to its gas emission cheats in 2015.

A while ago, Volkswagen admitted that it secretly installed software on over 500,000 vehicles that were designed to reduce the score for harmful emissions during testing. According to the lawsuit, the carmaker used the software to rub the government of hundreds of millions through deception. The cheat allowed VW to issue its securities at a more attractive rate than other car manufacturers. So far, the scandal has cost the company over $30 billion.

Martin Winterkorn, the former CEO of the company, is at the center of the scandal. The SEC intends to bar him and secure damages. Winterkorn resigned when the scandal started but he is still facing criminal charges with 12 other people over dieselgate. He denied playing any part in the security sales and the company has backed up his denial.

The carmarker is currently facing more than one PR scandal at this time. The lawsuit by the SEC was filed shortly after Herbert Diess, the current CEO of VW tendered a public apology for his poor choice of words. During an internal event in the company, Diess had used words that evoked a Nazi slogan.

After the news of the SEC’s lawsuit became public, VW responded stating that the complaint by the SEC is “flawed factually and legally.” The company insists that it would contest the lawsuit vigorously and clear its name. Part of the statement released was as follows:

“The Securities and Exchange Commission has brought an unprecedented complaint about securities we sold to investors even if they were not harmed and received their payments in full and without delay.”

It’s going to take a lot of effort from Volkswagen’s PR team to repair the damage to the company’s reputation.

Ufuoma Ogono

I am a full time writer with a first degree in sociology and a certification in freelance journalism. With more than three years experience, I cover worldwide news for various websites and I am currently a contributor to smartereum.com. I strive to connect the dots between the world of tech and start-ups, traditional industry, and the global economy. In my previous incarnations I have worked in investment banking and at the International Monetary Fund, so I also think and write a lot about economic policy issues and financial markets developments.I believe unbiased journalism is what builds a writer’s credibility so this is what I strive to achieve.

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