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VW Ordered to Face U.S. Investor Lawsuit Over Diesel Scandal
A California judge has ruled that plaintiffs may move forward with lawsuits claiming Volkswagen AG committed securities fraud when it rigged diesels to evade emission tests but touted them as “clean” engines, Reuters reports.
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A California judge has ruled that plaintiffs may move forward with lawsuits claiming Volkswagen AG committed securities fraud when it rigged diesels to evade emission tests but touted them as “clean” engines, Reuters reports.
Most of the complaints are from municipal pension funds that hold stakes in VW through American Depositary Receipts, a proxy for shares held by financial institutions in the German carmaker’s home country.
The lawsuits blame VW’s deception for their financial losses when the scandal caused the company’s market capitalization to plummet by $63 billion.
VW argued that any investor complaints must be filed in German, not U.S., courts. But District Court Judge Charles Breyer ruled the lawsuits may move forward because the U.S. “has an interest in protecting domestic investors against securities fraud.”
Breyer also has been handling VW’s compensatory settlements with affected diesel owners.
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