Volkswagen repeatedly lied and committed massive fraud to the investors in connection to the diesel-gate scandal. This is according to an allegation by the Securities and Exchange Commission. Volkswagen and the former chief executive Martin Winkertorn are being sued by the regulator over the diesel gate scandal. The suit is aimed at prohibiting the former Volkswagen chief executive from serving as a director or officer in any U.S company and recovers the ill-gotten gains. In 2018, Martin Winterkorn was charged by the US prosecutor over allegations to conspire to cover up the German automakers’ diesel emission
According to the Securities and Exchange Commission, Volkswagen issued more than $13 million bonds and assets backed securities from April 2014 to May 2015 in the US market at a time most of Volkswagen senior officials knew that over 500,000 U.S diesel vehicles totally surpassed vehicle emission limits.
“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.
In the Volkswagen annual report, they had said that SEC may be after them due to the involvement of the German vehicle emission scandal. SEC has asked Volkswagen for more information on potential securities law violations on any investment the company has sold to investors. SEC has the power to issue fines and civil penalties if they are sure you have violated any securities law.
Volkswagen released a statement to the media elaborating more on the matter
Volkswagen Full statement
“The SEC’s complaint is legally and factually flawed, and Volkswagen will contest it 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. 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. Regrettably, more than two years after Volkswagen entered into the landmark, multibillion-dollar settlements in the United States with the Department of Justice, almost every state and nearly 600,000 consumers, the SEC is now piling on to try to extract more from the company.”