US stock regulators have sued Volkswagen over the emissions cheating scandal, alleging the German automaker committed fraud by raising billions in corporate bonds while lying to investors about the environmental impact of its cars.
In a filing Thursday night in California, the Securities and Exchange Commission said that from April 2014 to May 2015, Volkswagen issued more than $13 billion in bonds and asset-backed securities in US markets while senior executives knew that more than 500,000 vehicles in the US grossly exceeded legal vehicle emissions limits.
By hiding the emissions scheme, Volkswagen reaped hundreds of millions of dollars in benefit by issuing securities at more attractive rates, the SEC complaint alleges.
“Issuers availing themselves of American capital markets must provide investors with accurate and complete information,” said Stephanie Avakian, co-director of the SEC enforcement division.
“As we allege, Volkswagen hid its decade-long emissions scheme while it was selling billions of dollars of its bonds to investors at inflated prices,” the complaint said.
It seeks “disgorgement of ill-gotten gains” with prejudgment interest, and civil penalties, according to a summary of the SEC action.
It also seeks to bar former VW CEO Martin Winterkorn from serving as director or officer of any publicly traded company in the US.
VW responded saying the SEC complaint is “legally and factually flawed” and that it will fight it vigorously.
