SEC Gets Final Judgment Against Volkswagen on Dieselgate

The U.S. Securities and Exchange Commission said today that it obtained final judgment by consent against defendant Volkswagen Group of America Finance, LLC (“VWGOAF”),* which the SEC had charged in 2019 with making false and misleading statements in connection with its 2014 and 2015 offerings of billions of dollars of corporate bonds.

The SEC’s complaint, filed on 14 March 2019, alleged,** among other things, that from April 2014 to May 2015, VWGOAF issued more than $8 billion in bonds at a time when senior VW executives knew that more than 500,000 of their vehicles in the U.S. grossly exceeded legal vehicle emissions limits, exposing the company to massive financial and reputational harm. The complaint said that VWGOAF made false and misleading statements to investors and underwriters about vehicle quality, environmental compliance, and VW’s financial standing.

VWGOAF, without admitting or denying the SEC’s allegations, consented to the entry of a final judgment permanently enjoining it from violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

The final judgment orders VWGOAF to pay $34.35 million in disgorgement and $14.4 million in prejudgment interest. Following the entry of the final judgment, the SEC dismissed its outstanding claims against VWGOAF’s ultimate parent company, Volkswagen AG, and Volkswagen AG’s former CEO, Martin Winterkorn. The Court had previously dismissed the SEC’s claims against VW Credit, Inc. on 20 August 2020. These actions have resolved the SEC’s case against Volkswagen in its entirety.

*VWGOAF is the financing subsidiary of Volkswagen Group of America, Inc.

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