Kessler Topaz, together with a couple U.S. law firms and local German lawyers, represents more than 500 institutional investors in securities litigation in Germany against Volkswagen AG (“VW”). The litigation follows the U.S. Environmental Protection Agency’s (“EPA”) September 18, 2015 issuance of a “Notice of Violation of the Clean Air Act” in response to its discovery that VW intentionally installed software in its TDI “clean diesel” engine cars in order to detect and evade U.S. emissions requirements. In the aftermath of the EPA’s Notice of Violation, VW admitted to the deception and issued a public apology. Numerous VW executives, including the former CEO Martin Winterkorn, resigned and face criminal charges in the U.S. and in Germany for, among others, conspiracy, fraud, and securities manipulation. Other VW employees were prosecuted and sentenced for criminal activity in the U.S. In response to the news, the price of VW common stock fell more than 39% while VW preferred shares fell more than 45%. Investors in Porsche (VW’s parent company) preferred stock also plummeted by approximately 43%. Our case alleges executives at VW knew of the existence of the software and failed to make timely disclosures to the market despite the fact that the information was relevant to VW stock price. Additionally, while VW was withholding the information from the market, it also made affirmative false statements to the public about the clean, green, and environmentally friendly nature of its diesel technology.
Under German law, the factual and legal issues that are common to all investors who filed claims against VW are decided before a Higher Regional Court via model case proceedings (known as the KapMuG). The Higher Regional Court of Braunschweig, Germany is overseeing the model case proceedings against VW and appointed one of the investors in our group to serve as the model plaintiff. Hearings in the case began on September 18, 2018 and the proceedings are ongoing.