A Volkswagen finance unit has been ordered to pay $48.8 million in a fraud case connected to the automaker’s 2015 emissions violations, the Securities and Exchange Commission said in a news release last week.
The SEC alleged in a 2019 lawsuit that Volkswagen Group of America Finance (VWGAF), a subsidiary of Volkswagen Group of America, made false and misleading statements in connection with its 2014 and 2015 offerings of more than $8 billion in corporate bonds.
The SEC claims the bonds were issued at a time when senior Volkswagen executives knew that more than 500,000 of the company’s vehicles in the United States “grossly exceeded legal vehicle emissions limits, exposing the company to massive financial and reputational harm,” the SEC said.
VWGAF has not admitted to or denied the allegations. Still, the company consented to the entry of a final judgment on April 3, and will pay $34.35 million in disgorgement and $14.4 million in prejudgment interest, the release said.
Following the judgment, the SEC dismissed its outstanding claims against Volkswagen AG and Volkswagen AG’s former CEO, Martin Winterkorn. The court had previously dismissed the SEC’s claims against VW Credit in August 2020, the release said.
The judgment concluded the SEC’s investigation into the scandal, for which Volkswagen agreed to pay $14.7 billion to partially resolve its Clean Air Act violations in 2016. The German automaker offered consumers a buyback and lease termination for nearly half a million model year 2009-2015 2.0 liter diesel vehicles sold or leased in the U.S. following the two settlements.
Volkswagen later agreed to plead guilty to three felony charges, resulting in a $2.8 billion criminal penalty, according to the Environmental Protection Agency. In separate resolutions, the automaker agreed to pay $1.5 billion, which covered the EPA’s claim for civil penalties against Volkswagen, as well as U.S. Customs and Border Protection claims for customs fraud.
