SAN FRANCISCO (Legal Newsline) – The Securities and Exchange Commission (SEC) has filed a complaint in the U.S. District for the Northern District of California, charging that Volkswagen AG, two of its subsidiaries and a former CEO defrauded bond investors through a "clean diesel" emissions fraud scheme.
According to a March 14 SEC news release, Volkswagen issued more than $13 million in bonds and asset-backed securities in the U.S. while its executives were aware that more than 500,000 of the company's vehicles did not meet legal vehicle emissions limits.
The SEC alleges these actions led to the company's "massive financial and reputational harm." Volkswagen was able to gain hundreds of millions of dollars by concealing the emissions fraud and issuing securities at "more attractive rates for the company, the SEC said in its complaint.
"Issuers availing themselves of American capital markets must provide investors with accurate and complete information," SEC Division of Enforcement co-director Stephanie Avakian said in a statement. "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 SEC seeks permanent injunctions, disgorgement of ill-gotten gains as well as civil penalties.