Yesterday, a group of Volkswagen shareholders demanded $10.6B in damages resulting from the now-infamous dieselgate in the opening day of Volkswagen’s long-awaited investor trial.
Since VW pleaded guilty to criminal charges of falsifying emissions tests in 2015, it has paid nearly $32B to customers and regulators. But it’s not over yet — the German automaker still has to settle the score with its angriest adversary: its own investors.
VW didn’t just embezzle from the environment, it polluted portfolios
Unlike the EPA’s original criminal case (which convicted VW of conspiracy to commit wire fraud and violating the Clean Air Act, landing execs in jail), VW investors have accused the company of failing to disclose obligatory information about the impending disaster to shareholders.
After VW’s diesel debacle first hit the fan when the EPA dished out a “notice of violation” on Sept. 18, 2015, the company failed to alert its shareholders of the scandal for 4 days — long enough for the VW shares to lose 37% of their value.
A well-funded race to recoup big losses
The suit is well-funded thanks to vindictive hedge funds that bet against VW during its scandal and lost. But payouts for many investors depend on whether the court allows payouts for a scandal that began well before the 2012 statute of limitations in 2005.
Win or loss, VW still has more to clean up
Since these investors represent less than half of the total plaintiffs, this result will set a multibillion dollar precedent for the rest of the 4k plaintiffs.
And, even if it comes out on top of this case, VW’s not short on scandals to manage. Just last week, the company recalled 10k SUVs due to airbag defects.