A Volkswagen finance unit was ordered to pay $48.75 million as part of a final judgment obtained by the Securities and Exchange Commission (SEC) to resolve historical violations related to the automaker’s emissions scandal.
Volkswagen Group of America Finance (VWGOAF) must pay $34.35 million in disgorgement and $14.4 million in prejudgment interest, the SEC announced in a litigation release published Friday.
In 2015, VW confessed to cheating U.S. emissions requirements by installing defeat devices in its vehicles. In March 2019, the SEC charged VWGOAF with making false and misleading statements related to its 2014-15 offerings of corporate bonds, including to investors and underwriters about vehicle quality, environmental compliance, and financial standing.
The details: VWGOAF issued more than $8 billion in bonds in U.S. markets when senior VW executives knew more than half a million vehicles in the United States exceeded legal vehicle emissions limits, the SEC alleged.
These practices led VW to massive financial and reputational harm and an eventual three-year corporate monitorship that shook up its organizational structure. The company updated its internal policies, including training and code of conduct, during the course of its monitorship.
The SEC said the judgment against VWGOAF concludes its case against VW. The agency dismissed its outstanding claims against parent company Volkswagen AG and former VW Chief Executive Martin Winterkorn.
Company response: “Volkswagen Group of America Finance is pleased to have reached an agreement with the SEC, which fully resolves the last significant legal action related to the diesel matter in the United States,” a VW spokesperson said in an emailed statement. ”Volkswagen values a constructive relationship with regulators in all of our markets as we work to build the future of sustainable mobility.”
The company agreed to the judgment without admitting or denying the SEC’s allegations.
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