VW and ex-boss sued by US regulators over dieselgate scandal | Business News

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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.

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The dieselgate scandal has cost VW more than 30 billion dollars in total to date

VW described the allegations as flawed.

The action 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.

Martin Winterkorn quit as chief executive of the VW group shortly after the diesel emissions scandal came to light
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Martin Winterkorn quit as chief executive of the VW group shortly after the diesel emissions cheating came to light

VW said he played no part in the sales.

The lawsuit was not the only negative PR the company had to deal with.

It was filed just hours after VW’s current chief executive, Herbert Diess, apologised for using an “unfortunate choice of words” that evoked a Nazi slogan during an internal management event.

In its response to the legal action, 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.”


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