On March 14, almost six months after Volkswagen AG (“VW”) admitted to installing software in its diesel vehicles to cheat emissions testing, VW was hit with a $3.6 billion lawsuit in Germany. The case was filed in Braunschweig on behalf of 278 institutional investors, including investors from Australia, Austria, Canada, Denmark, France, Italy, Japan, Luxembourg, the Netherlands, Norway, Sweden, Switzerland, Taiwan, the U.K., and the U.S. Investors claim that the German automaker took too long to disclose information about its diesel emissions scandal.
The U.S. Environmental Protection Agency (EPA) first publicly unveiled the scandal on September 18, 2015, when it issued a notice of violation of the Clean Air Act to VW. VW reacted with an apologetic press release two days later and a formal market disclosure on September 22. Immediately thereafter, VW’s stock price plummeted and VW became the target of regulatory investigations in multiple countries.
VW is currently facing a multitude of lawsuits around the world, including 70 cases pending in Braunschweig over losses on VW shares, seeking between 600 and 2 million euro. While this suit is VW’s biggest legal challenge in Germany to date, it may not be the last. Other institutional investors are reportedly in talks about bringing an additional suit.
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