The SEC has sued Volkswagen, saying that it has perpetrated “a massive fraud”.
During the period April 2014 to May 2015, Volkswagen has issued about $13 billion worth of bonds and securities to investors in the U.S. markets.
In spite of a pollution emission scandal involved in the Volkswagen diesel vehicles, the issue has been made without disclosing this fact. Illegal software had been used to cheat the emission tests, but information about this scandal has not been revealed, on its issue.
The company has been exceeding emission limits permitted and this fact was known by senior executives when the bonds and securities were issued to investors, but knowledge has not reached investors.
Securities were issued to investors at attractive rates, which have misled them into making investments on such securities.
The Securities and Exchange Commission has filed a case in the court against Volkswagen on this fraudulent issue. The regulator claims that U.S. investors have been deceived by the company.
The former CEO Martin Winterkorn and Volkswagen face diesel emission scandal. The CEO has been accused by the prosecutors, of conspiring to cover up the cheating made by the German automaker in exceeding emission limits.
Volkswagen has benefitted by millions of dollars by the issue of securities says the SEC. These are “ill-gotten gains” that have to be recovered, claim prosecutors. A suit is filed to bar Winterkorn from being an officer or director in any public company in the U.S.
However, Volkswagen says that the complaint made by the SEC is a legal and factual flaw though VW has admitted to installing software secretly in these vehicles in 2015, to cheat the emission tests.
Volkswagen has now agreed to pay about $25 billion for the scandal which has been continuing for almost three-and-a-half years old. Further, it has offered to buy back its 500,000 vehicles that were polluting the environment.