The U.S. Securities and Exchange Commission (SEC) is suing Volkswagen (VW) and its former chief executive Martin Winterkorn over the German automaker's diesel emissions scandal, alleging a "massive fraud" on U.S. investors. The cars emitted 40 times more harmful nitrogen oxides than allowed under USA rules.
VW admitted in September 2015 to secretly installing software in 500,000 USA vehicles to cheat government exhaust emissions tests and pleaded guilty in 2017 to felony charges. The scandal has caused a political backlash against diesel, which has caused sales of the fuel type to slump from manufacturers around the world.
VW has already paid out billions of dollars in fines to United States and German authorities in criminal and civil actions. At issue: upwards of $13 billion in bonds and asset-backed securities issued here between April 2014 to May 2015-a period when, the SEC's lawsuit alleges, Volkswagen's upper echelons were well aware that its 500,000 diesel vehicles in the USA were employing illegal software in order to fool emissions tests.
The commission is charging the world's second biggest auto manufacturer of "reaping hundreds of millions of dollars in benefit by issuing the securities at more attractive rates for the company", according to the document filed in San Francisco on Thursday.
In the complaint it was stated that the company misled investigators, "concocted a sham software fix" and destroyed evidence.
"Issuers availing themselves of American capital markets must provide investors with accurate and complete information", co-director of the division of enforcement Stephanie Avakian said.
VW said in a statement the SEC complaint "is legally and factually flawed, and Volkswagen will contest it vigorously". No investors were harmed, VW said.
Volkswagen said Friday that the SEC is simply repeating unproven claims about Winterkorn. It has also pleaded guilty to criminal charges in the United States and several managers, including Winterkorn, were charged there.
The SEC's complaint, filed in the U.S. District Court for the Northern District of California, charges Volkswagen AG, its subsidiaries Volkswagen Group of America Finance, LLC and VW Credit, Inc., and Winterkorn with violating the antifraud provisions of the federal securities laws.