Published on March 16th, 2019 | by Steve Hanley0
SEC Charges Volkswagen And Martin Winterkorn With Massive Fraud
March 16th, 2019 by Steve Hanley
Volkswagen is peddling furiously to leave the stain of its diesel cheating scandal behind. It is trumpeting its lofty electric car expectations to anyone who will listen, and in truth those claims do suggest the company is one of very few legacy automakers who have actually embraced the electric car future.
But despite its best efforts, the cheating scandal just won’t go away. The Securities and Exchange Commission (SEC) — the bane of Tesla and Elon Musk — has charged Volkswagen and its former chief executive, Martin Winterkorn, with defrauding investors. Well, OK. We sort of new that, didn’t we? So what’s the new news here? According to the SEC, Winterkorn knew about the cheating years earlier than 2015, when the cheating scandal exploded. In fact, the SEC says Winterkorn was in on the whole diesel emissions cheating scheme as far back as 2007.
That could put Winterkorn in deep legal doo doo both in the US and in Germany. He has previously testified to the German Parliament that he didn’t know anything about emissions cheating until just before the scandal broke in September 2015. What the consequences of lying to Parliament might be we have no idea, but some serious legal jeopardy may be in the offing for the man who was once revered as a national hero in a country where engineers are considered gods.
Winterkorn’s attorney, Steven Molo, declined a request for comment from the New York Times, referring all questions to Volkswagen. In a statement, Volkswagen said, “The S.E.C.’s complaint is legally and factually flawed, and Volkswagen will contest it vigorously.” They certainly should. If the SEC is successful, the company could be looking at billions more in fines and penalties at a time when it needs every pfennig it can find to bring competitive electric cars to market.
The SEC action could set the fox among the chickens worldwide. Volkswagen allegedly sold about 8.5 million diesel cars equipped with software designed to deceive emissions testing worldwide. Will those countries now reopen their own investigations in light of these latest allegations by the SEC? The future is damnably difficult to predict, but one suspects there are a lot of deeply concerned executives pacing the executive suite in Wolfsburg these days.
The question for consumers will be whether people will feel comfortable purchasing automobiles in the future from a company that may willfully have put so many lives at risk in the past? Volkswagen sales have rebounded nicely from the dark days of 2015. People have short memories, it seems.