VW and ex-boss sued by US regulators over dieselgate scandal | Business News
Volkswagen is facing a lawsuit filed by US regulators which accuses the carmaker and its ex-boss of “massive fraud” ahead of the dieselgate scandal of 2015.
The Securities and Exchange Commission (SEC) launched the civil action in San Francisco late on Thursday – threatening to add to the German carmaker’s $25bn bill to date for emission test cheating in the country.
It concerns the company’s issue of more than $13bn in bonds and asset-backed securities in US markets in the run-up to its admission that 500,0000 vehicles were fitted with software designed to lower harmful emissions while being tested.
The lawsuit claimed VW launched the programmes at a time when senior executives knew about the so-called defeat devices in its diesel models and the firm “reaped hundreds of millions of dollars in benefit by issuing the securities at more attractive rates” because of the deception.
VW described the allegations as flawed.
The lawsuit also seeks to bar its chief executive at the time, Martin Winterkorn, from holding directorships in the US and secure damages.
Mr Winterkorn, who quit at the height of the scandal, is among 13 people to face criminal charges over dieselgate in the US but he is never likely to see a courtroom as the country has no extradition treaty with Germany.
VW said he played no part in the sales.
The company’s statement said the SEC complaint was “legally and factually flawed, and Volkswagen will contest it vigorously.
“The SEC has brought an unprecedented complaint over securities sold only to sophisticated investors who were not harmed and received all payments of interest and principal in full and on time.”