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SEC sues Volkswagen, Winterkorn, citing 'Dieselgate' fraud on investors
WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission sued Volkswagen AG and its former chief executive Martin Winterkorn over the German automaker's diesel emissions scandal, accusing the company of perpetrating a "massive fraud" on U.S. investors.
The SEC said in its civil complaint filed in San Francisco late on Thursday that from April 2014 to May 2015, Volkswagen issued more than $13 billion (£9.8 billion) in bonds and asset-backed securities in U.S. markets at a time when senior executives knew that more than 500,000 U.S. diesel vehicles grossly exceeded legal vehicle emissions limits.
Volkswagen "reaped hundreds of millions of dollars in benefit by issuing the securities at more attractive rates for the company," the SEC said, adding VW "repeatedly lied to and misled United States 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 United States."
The suit seeks to bar Winterkorn from serving as an officer or director of a public U.S. company and recover "ill-gotten gains" along with civil penalties and interest.
Winterkorn, who resigned days after the scandal became public in September 2015, was charged by U.S. prosecutors in 2018 and accused of conspiring to cover up the German automaker's diesel emissions cheating.
He remains in Germany.
Volkswagen said in a statement the SEC complaint "is legally and factually flawed, and Volkswagen will contest it vigorously. 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 automaker added that the SEC "does not charge that any person involved in the bond issuance knew that Volkswagen diesel vehicles did not comply with U.S. emissions rules when these securities were sold" but repeats claims about Winterkorn "who played no part in the sales".
https://www.marketscreener.com/business-leaders/Martin-Winterkorn-4841/news/SEC-sues-Volkswagen-Winterkorn-citing-Dieselgate-fraud-on-investors–28170353/?countview=0