Volkswagen Sets a New German Record (for Investor Lawsuits)

Steph Willems
by Steph Willems
volkswagen sets a new german record for investor lawsuits

It’s not the podium an automaker wants to find itself on top of.

After marking the first anniversary of its emissions debacle, former “clean diesel” builder Volkswagen finds itself staring down the barrel of $9.15 billion in investor lawsuits, the Wall Street Journal reports.

When it comes to being sued by investors, no German company can match Volkswagen’s performance.

In total, the Braunschweig district court in Germany (which handles all suits against the automaker) has logged 1,400 claims from investors seeking damages. In the days after the Environmental Protection Agency’s public charges against Volkswagen, the automaker’s share price nose-dived, erasing a third of its value.

Almost immediately, investors cried that the automaker didn’t provide a warning of the impending stock slide.

Now, a very diverse and angry group has come calling for its pound of diesel-soaked flesh. Reportedly, the number of claims is equal to half a year’s worth of civil claims at the German court. The court has even purchased new warehouses to house all the paperwork.

Among the litigants are U.S. pension funds, who once saw Volkswagen’s stock as a stable place to invest. Bloomberg reports the U.S. government is another claimant, which hopes to recover $33.5 million.

To recoup their losses, investors will need to prove that Volkswagen knew about the looming scandal and acted intentionally to keep investors in the dark.

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  • Voyager Voyager on Sep 21, 2016

    The more lawsuits, the bigger VW's exposure... the lower its market value. Which is not in the interest of major shareholders. Ah, capitalism at its 'finest'. "We're all in it for the money." Heard that Audi's fresh new head of development Knirsch has to clear his desk, since he's suspected of being involved with Dieselgate too.

  • SCE to AUX SCE to AUX on Sep 21, 2016

    "...investors cried that the automaker didn’t provide a warning of the impending stock slide." I don't know how they could have provided a warning. The complaint should be centered around the lost value, not the lack of warning.

    • See 2 previous
    • Tedward Tedward on Sep 21, 2016

      @05lgt There's still income, credit lines and cash on hand, especially in the manufacturing sector. Think of it as the year with the giant dividend from an investor's point of view. I have no idea how this being a German company would affect things. It seems like almost any corporate scandal or earnings forecast not met is accompanied by investor claims. But hey, not a lawyer.