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US SEC files suit against Volkswagen

March 15, 2019

The US Securities and Exchange Commission has filed suit against Volkswagen and its former chief executive, Martin Winterkorn, claiming "massive fraud." VW said the SEC is trying to "extract more from the company."

A VW emblem on a car with a red, white and blue US flag in the background
Image: picture-alliance/dpa/F. May

In a complaint filed in San Francisco, the US Securities and Exchange Commission (SEC) on Thursday accused German automaker Volkswagen of perpetrating a "massive fraud" on US investors in the Dieselgate scandal.

From April 2014 to May 2015, VW issued more than $13 billion (€11.5 billion) in bonds and asset-backed securities in US markets at a time when senior executives knew that more than 500,000 diesel vehicles in the country exceeded legal vehicle emissions limits.

Volkswagen "reaped hundreds of millions of dollars in benefit by issuing the securities at more attractive rates for the company," the SEC said.

The suit also seeks to bar former VW CEO Martin Winterkorn from serving as an officer or director of a public US company, and recover "ill-gotten gains."

Volkswagen, Europe's largest automaker, this week announced both €12 million euros in profitsand plans to cut 7,000 jobs by 2023.

VW: Complaint 'legally and factually flawed'

Volkswagen said the SEC complaint "is legally and factually flawed, and Volkswagen will vigorously contest it.

"Regrettably, more than two years after Volkswagen entered into a 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," a spokesperson said in a statement.

VW also repeated claims that Winterkorn "played no part in the sales."

Read more: Germany's top court backs VW customers over 'Dieselgate'

In September 2015, VW admitted to secretly installing software in 500,000 US vehicles to cheat government exhaust emissions tests. It pleaded guilty to felony charges in 2017; 13 people have been charged in the US, including Winterkorn.

The automaker agreed to pay more than $25 billion in claims from owners, environmental regulators, states and dealers, and it offered to buy back the polluting vehicles.

cmk/sms (Reuters, dpa)

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