September 19, 2020

US accuses Volkswagen and its former CEO of fraud | Economy

US accuses Volkswagen and its former CEO of fraud | Economy



The United States opens a new legal front against Volkswagen for the emissions scandal. The securities regulator (SEC) now accuses the German automaker, two subsidiaries of the automotive group and its former CEO Martin Winterkorn of having "perpetrated a massive fraud" with which he deceived the investors of US fixed income and allowed him to raise billions.

The authorities in the United States put the spotlight on Winterkorn from the beginning, when the agency dedicated to the protection of the environment (EPA) revealed in September 2015 that low command his installed an electronic device in cars to avoid controls . The company did not inform the regulators of this manipulation, which allowed the legal limits to be exceeded.

The SEC, following a tactic similar to junk mortgage fraud, believes that the company made "a series of deceptive communications about the environmental impact of the clean diesel fleet." In this way he was able to go to the bond market and raise 13 billion dollars between April 2014 and May 2015 using false advertising about the cars he made.

The financial regulator says in the information made public last night that "the executives of the company knew that more than half a million vehicles in the US exceeded the legal limits" that the EPA established for emissions of polluting gases. By hiding the fraud, explains the SEC, with the plot they managed to issue the bonds "at more attractive rates for the company".

The communications with the investors, therefore, were "false" and "erroneous" about the quality of the vehicles that were being sold. "Volkswagen hid its emissions scheme for a decade while selling billions of dollars in bonds at inflated prices," Stephanie Avakian, head of the SEC investigation, said in a press release.

The lawsuit was filed in California as the electric car maker Tesla introduced the Model Y, a familiar SUV that uses the structure of the Model 3 utility, to the public. In addition to the Volkswagen group, the subsidiary Volkswagen Group is also cited in the legal action. of America FInance and VW Credit for "violating anti-fraud provisions" in the US.

The SEC seeks with this action to recover the money that was defrauded to the bondholders for not offering them "complete and accurate information" about the company. The so-called DieselGate forced Volkswagen to disburse more than 28,000 million euros in penalties and compensations to the owners of cars with mock engines. The majority of the sum was made in the US.

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