German Prosecutors Confirm VW CEO as Focus of Official Investigation

Matt Posky
by Matt Posky

German prosecutors verified the launch of a formal investigation involving Volkswagen Group CEO Matthias Müller and chairman Hans Dieter Poetsch due to suspected market manipulation.

While we reported on the probe last week, Müller’s inclusion was highly unexpected. It was unclear what, if anything, officials had on the CEO and why they waited until now to add him to the growing number of upper-level executives under examination.

The Stuttgart prosecutor’s office stated on Wednesday the investigation was prompted by a request from market regulator BaFin in the summer of 2016. After spending some time gathering evidence, investigators began to believe executives deliberately postponed releasing information to investors about the scale of the scandal and didn’t adequately disclose its financial consequences.

VW Group maintains the leadership had complied with disclosure rules and executives were unaware of the scope of the emissions cheating scandal when it kicked-off.

Stuttgart’s probe isn’t focused on the causes of the scandal itself, but at how the Porsche Automobil Holding SE board, including Müller, responded to it in those first few months. German law mandates companies to broadly and swiftly disclose any information that could affect decisions to buy or sell a company’s shares.

Müller is already taking heat from investors after VW refused to publish a report on the internal investigation into the emissions cheating, refuting an original pledge to share the findings in their entirety. Volkswagen claimed it simply wasn’t allowed to but these new allegations cast further doubt on the validity of that statement.

If he or any of the other board members are found to have dragged their feet or to possessed prior knowledge of the emissions scandal, shareholders burned by the stock plunge won’t be the only ones coming after them. In Germany, stock manipulation is fairly a serious crime and typically comes with a whopping fine and the occasional healthy jail sentence.

[Image: Volkswagen] [Source: Reuters]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Tosh Tosh on May 17, 2017

    If I leased an e-Golf, would that help drive VW into the ground faster? Just trying to help...

    • SCE to AUX SCE to AUX on May 17, 2017

      Hard to say, but paraphrasing Sergio, FCA might collapse if you lease a 500e!

  • SCE to AUX SCE to AUX on May 17, 2017

    Once investigators seized the 100 TB of data during a raid, how is VW now communicating internally about the coverup? Windtalkers?

    • Lorenzo Lorenzo on May 18, 2017

      VW internal discussions were conducted using telepathy. It was one of the last projects VW worked on during the nazi era, and kept under wraps, to be used only for top-secret executive communications. Unfortunately, the execs made doodles while communicating, and the investigators confiscated the doodles, and hired code-breakers to figure out what they were discussing.

  • MaintenanceCosts It's not a Benz or a Jag / it's a 5-0 with a rag /And I don't wanna brag / but I could never be stag
  • 3-On-The-Tree Son has a 2016 Mustang GT 5.0 and I have a 2009 C6 Corvette LS3 6spd. And on paper they are pretty close.
  • 3-On-The-Tree Same as the Land Cruiser, emissions. I have a 1985 FJ60 Land Cruiser and it’s a beast off-roading.
  • CanadaCraig I would like for this anniversary special to be a bare-bones Plain-Jane model offered in Dynasty Green and Vintage Burgundy.
  • ToolGuy Ford is good at drifting all right... 😉
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