US Slaps Volkswagen, Ex-CEO Winterkorn With Lawsuit Over 'Dieselgate' Scandal

US SEC sues Volkswagen and ex-CEO over diesel scandal

The US Securities and Exchange Commission is suing Volkswagen and its former chief executive, accusing them of defrauding investors by making "deceptive" claims about the environmental impact of its cars. At issue: upwards of $13 billion in bonds and asset-backed securities issued here between April 2014 to May 2015-a period when, the SEC's lawsuit alleges, Volkswagen's upper echelons were well aware that its 500,000 diesel vehicles in the United States were employing illegal software in order to fool emissions tests.

"By concealing the emissions scheme, Volkswagen reaped hundreds of millions of dollars in benefit by issuing the securities at more attractive rates for the company", reads the filing, which calls the scheme "a massive fraud", per CNBC.

Volkswagen did not immediately comment early Friday.

Volkswagen's pivot to electric vehicles comes as it seeks to comply with new limits on carbon dioxide emissions in Europe, and a push by China for more low-emission vehicles.

It adding that VW "repeatedly lied to and misled USA investors, consumers, and regulators as part of an illegal scheme to sell its purportedly "clean diesel" cars and billions of dollars of corporate bonds and other securities in the U.S.". The suit targets both the company and former CEO Martin Winterkorn in an effort to recoup "ill-gotten gains" and prevent Winterkorn from ever being an officer or director at a U.S. public company.

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Mr. Winterkorn resigned shortly after the scandal was revealed.

"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", the company said.

The SEC's complaint, filed in the U.S. District Court for the Northern District of California, charges Volkswagen AG, its subsidiaries Volkswagen Group of America Finance, LLC and VW Credit, Inc., and Winterkorn with violating the antifraud provisions of the federal securities laws.

The company has paid some $20 billion in fines and civil settlements.

The decision is the latest blow to the German carmaker from the "dieselgate" scandal, in which it admitted to installing software on its vehicles to trick emissions tests. 13 people have been charged in the United States, including Winterkorn and four Audi managers.

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