SEC Charges VW, Ex-CEO Winterkorn With Defrauding U.S. Bond Investors
March 15 2019 - 2:11AM
Dow Jones News
By WSJ Staff
The U.S. Securities and Exchange Commission said it charged
Volkswagen AG, two of its units, and former Chief Executive Martin
Winterkorn with defrauding U.S. bond investors.
In a news release issued late Thursday, the SEC said the German
auto maker raised billions of dollars through the corporate bond
and fixed-income markets, while making a series of deceptive claims
about the environmental impact of the company's "clean diesel"
fleet.
The SEC said it alleges in its complaint that from April 2014 to
May 2015 VW issued more than $13 billion in bonds and asset-backed
securities in the U.S. markets at a time when senior executives
knew that more than 500,000 vehicles in the U.S. grossly exceeded
legal vehicle-emissions limits, exposing the company to massive
financial and reputational harm.
The SEC's complaint alleges that Volkswagen made false and
misleading statements to investors and underwriters about vehicle
quality, environmental compliance, and VW's financial standing, the
agency said.
The complaint alleges that VW, by concealing the emissions
scheme, reaped hundreds of millions of dollars in benefits by
issuing the securities at more-attractive rates for the company,
the agency said.
The SEC said it charged VW, Mr. Winterkorn and subsidiaries
Volkswagen Group of America Finance LLC and VW Credit Inc. with
violating the antifraud provisions of the federal securities
laws.
The SEC complaint seeks permanent injunctions, disgorgement of
ill-gotten gains with prejudgment interest, and civil penalties,
the SEC said. The complaint also seeks an officer and director bar
against Mr. Winterkorn, the SEC said.
"Issuers availing themselves of American capital markets must
provide investors with accurate and complete information," said
Stephanie Avakian, co-director of the SEC's division of enforcement
in the news release. "As we allege, Volkswagen hid its decadelong
emissions scheme while it was selling billions of dollars of its
bonds to investors at inflated prices."
The SEC's complaint was filed in the U.S. District Court for the
Northern District of California, the SEC said.
(END) Dow Jones Newswires
March 15, 2019 01:56 ET (05:56 GMT)
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