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WASHINGTON (Reuters) – The US Securities and Exchange Commission (SEC) on Monday defended the pace of its Volkswagen AG investigation (VOWG_p.DE) after a judge had asked why the agency had waited two years after a global scandal related to vehicle emissions to sue the builder.
FILE PHOTO: The Volkswagen logo is visible in front of its plant in Bratislava, Slovakia, on July 4, 2019. REUTERS / Radovan Stoklasa / File Photo
The SEC began a civil suit in March for Volkswagen and former managing director Martin Winterkorn for defrauding investors in US bond offerings.
VW said the SEC's complaint "is legally and factually flawed, and will vigorously challenge it".
In 2015, Volkswagen was caught using illegal software to deceive pollution tests in the United States, which provoked a brutal reaction against diesel vehicles, which cost it up to 30 billion euros ($ 33.65 billion) in fines, penalties and surrender costs. In May, it generated an additional 5.5 billion euros in contingent liabilities.
In May, US District Judge Charles Breyer had questioned the SEC's "delay" in prosecuting VW over two years after the German automaker settled the US Department of Justice case, pleaded guilty to three crimes and paid $ 4.3 billion in penalties.
"My basic question is what took you so long," said Breyer, adding that he was "totally mystified" as to why the SEC had been waiting until 2019.
On Monday, the SEC released the details of its investigation into the court records and said it had lengthy settlement discussions with the builder before deciding to file a complaint.
The SEC stated that it had received approximately 2 million pages of documents from VW and immediately postponed the publication of formal subpoenas after VW had agreed to voluntarily produce documents.
In its document filed Monday in court, the SEC said its staff "worked hard and as quickly as possible under very difficult circumstances to conduct an investigation into many different securities offerings conducted by a foreign company and three of its subsidiaries. over many years ", and" VW Treaty fairly and made available to society a complete process throughout its investigation. "
The agency added that its challenges "included long delays by VW in producing documents and other information" and "uncooperative witnesses who were either hesitant or unwilling to speak to staff".
Volkswagen did not immediately comment on Monday.
The SEC's offices in New York and Chicago opened investigations in September 2015, wrote Jeffrey Shank, a SEC lawyer, filed the case in court, stating that the agency was not in charge. not aware of the existence of VW bonds until 2017 and that she had then taken 10 days. months for VW to reveal who "was responsible for the statements" made to investors in VW bonds ".
The SEC said that former Volkswagen of America CEO Michael Horn had refused to be questioned by the SEC even after informing him in September 2017 of his lawyers that the United States Department of Justice would be willing to offer Horn a secure pbadage.
The SEC was also unable to interview Winterkorn.
Shank said the SEC had been holding talks for several months and had given VW and Winterkorn lawyers an opportunity to argue why the SEC should not sue.
Regulators and investors claim that VW should have informed them earlier of the scale of the scandal, while the automaker said that it was not certain that fines and penalties would be imposed to billions of dollars.
VW issued more than $ 13 billion worth of bonds and badet – backed securities in US markets at a time when senior officials knew that more than 500,000 US diesel vehicles far exceeded legal limits. issues, according to the complaint filed with the SEC.
Volkswagen has raised hundreds of millions of dollars "by issuing securities at more attractive rates for the company," said the SEC.
Report by David Shepardson in Washington; edited by Matthew Lewis and G Crosse
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