SEC Is Going After VW's 'Ill-Gotten Gains'

The SEC is going after Volkswagen. 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 US 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. 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 US public company.

The Wall Street Journal notes US attorneys have also charged Winterkorn over dieselgate, but Germany doesn't extradite its citizens. VW offered a statement that calls the SEC's filing "legally and factually flawed" and says "Volkswagen will contest it vigorously." It claims the securities were "sold only to sophisticated investors who were not harmed and received all payments of interest and principal in full and on time," and that Winterkorn had no part in those sales. "Regrettably, more than two years after Volkswagen entered into landmark, multibillion-dollar settlements in the United States ... the SEC is now piling on to try to extract more from the company." The BBC reports Volkswagen is already on the hook for more than $25 billion in US criminal and civil fines. (VW's current CEO is sorry about a Nazi gaffe.)