SAN DIEGO and WOLFSBURG, Germany, Sept. 28, 2015 /PRNewswire/ -- Shareholder rights law firm Robbins Arroyo LLP announces that a securities fraud class action complaint was filed in the U.S. District Court for the Eastern District of Virginia. The complaint alleges that officers and directors of Volkswagen (OTC: VLKAY) violated the Securities Exchange Act of 1934 between November 19, 2010 and September 21, 2015, by making materially false and misleading statements about Volkswagen's operations and its financial condition. Volkswagen, together with its subsidiaries, manufactures and sells automobiles primarily in Europe, North America, South America, and the Asia-Pacific.
View this information on the law firm's Shareholder Rights Blog:
Volkswagen Fails to Disclose Unlawful Software in its Vehicles
According to the complaint, Volkswagen officials failed to disclose that the company had utilized a "defeat device" in its diesel cars that allowed the cars to temporarily reduce emissions and achieve higher fuel economy during testing. The cars also discharged dramatically higher emissions when testing was not being conducted. The complaint further alleges that the use of this device allowed Volkswagen to market its diesel vehicles to environmentally conscious customers, increasing its sale of diesel cars in the U.S. and abroad, along with its profitability. Due to the company's misleading statements, Volkswagen's ordinary and preferred American Depositary Receipts ("ADRs") traded at artificially inflated prices, reaching highs of $54.84 and $56.55 per ADR, respectively, on December 30, 2013.
On September 18, 2014, the Environmental Protection Agency issued a Notice of Violation, stating that Volkswagen had installed sophisticated software that could turn on the emissions controls only during official emissions testing. At all other times, the emissions controls were deactivated, releasing pollution into the environment at levels exceeding those allowed by federal and state clean air regulators. That same day, The New York Times published an article reporting that the company had admitted to using a defeat device and that it could be fined as much as $18 billion as a result of an investigation by the Department of Justice. On this news, the price of Volkswagen's ordinary ADRs dropped over 33% to close at $25.44 per share on September 22, 2015. Additionally, Volkswagen's preferred ADRs closed at $23.98 per share on September 22, 2015, together resulting in hundreds of millions of dollars in losses to Volkswagen investors.
Volkswagen Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
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SOURCE Robbins Arroyo LLP