This securities fraud class action lawsuit alleges that Volkswagen AG made materially false and misleading statements and omissions to investors concerning company operations, financial condition and outlook and specifically failed to disclose that it had utilized a "defeat device" in certain diesel cars which allowed the vehicles to temporarily reduce emissions during testing yet emit at dramatically higher levels outside of testing conditions.
What investors are part of this class action? The class period is currently defined as all persons who purchased or otherwise acquired the publicly traded and preferred American Depositary Receipts ("ADRs") of Volkswagen AG between November 19, 2010 and September 21, 2015 inclusive (the "Class Period"). Volkswagen preferred and ordinary ADRs are sponsored by J.P. Morgan and trade in the United States on the over-the-counter ("OTC") market under the symbols VLKPY and VLKAY, respectively.
Procedural Status: This lawsuit was filed on September 25, 2015 and is captioned City of St. Clair Shores Police and Fire Retirement System v. Volkswagen AG, et al. It was filed in United States District Court for the Eastern District of Virginia. Its civil docket number is 1:15-cv-01228-LO-MSN. The lead plaintiff deadline is November 24, 2015.
Headquartered in Wolfsburg, Germany, Volkswagen is one of the world's leading automobile manufacturers and the largest carmaker in Europe. The Company comprises 12 brands and represents approximately 13% of the global passenger car market. Volkswagen operates 31 production plants throughout the world, including one in Chattanooga, Tennessee.
The plaintiff in this class action lawsuit alleges that prior to and during the Class Period, the defendants engaged in a scheme to defraud and made numerous materially false and misleading statements and omissions to investors. It is asserted that specifically:
On September 18, 2015, the United States Environmental Protection Agency (EPA) issued a Notice of Violation stating that defendants had installed the defeat device on Volkswagen and Audi vehicles sold in the U.S. in order to evade emissions rules. On the same day the New York Times published a front-page article entitled "U.S. Orders Major VW Recall Over Emissions Test Trickery," which reported that the company had illegally installed software...to evade standards for reducing smog. It was also widely reported that the U.S. Department of Justice had opened an investigation and that fines of as much as $18 billion could eventually be imposed due to defendants' misconduct.
The plaintiff alleges that as a result of the company's misleading statements and omissions, its ordinary and preferred ADRs traded at artificially inflated prices, reaching highs of $54.82 and $56.55 each, respectively, on December 30, 2013. However, following the damaging news reports and disclosures regarding the "defeat device," Volkswagen's ordinary ADR prices plummeted 33% from $38.03 per share to $25.44 between September 17 and September 22, and its preferred ADR share prices declined from a close of $38.05 to a close of $23.98 during the same period. These drops, it is argued, represent significant losses to the plaintiff and similarly situated members of the class.
This case is in the notice period. When a shareholder brings suit under certain federal securities law, generally that shareholder must give notice via a press release. This notice starts a sixty-day period of time when any shareholder can investigate the underlying claims of the lawsuit and then elect to bring suit as well. At the end of this sixty-day period, the court appoints one shareholder (or a group of shareholders) to prosecute the securities litigation. We will review the docket again in June and update this page as warranted.