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Top Volkswagen executives charged with market manipulation in emissions scandal

The scandal has cost the German automaker more than 30 billion euros since September 2015

Volkswagen CEO Herbert Diess, right, and Chairman Hans Dieter Poetsch have been charged with market manipulation in connection with the automaker's diesel emissions scandal. (Michael Sohn/AP)
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Top Volkswagen executives, including chief executive Herbert Diess, have been charged with market manipulation in the latest chapter of the auto giant’s diesel emissions scandal, German prosecutors say.

Diess, Chairman Hans Dieter Poetsch and former CEO Martin Winterkorn were all charged in Braunschweig in northern Germany, Volkswagen’s home region, for failing to warn investors about the scandal and its financial impact on the company, prosecutors said in a statement on Tuesday.

“The company has meticulously investigated this matter with the help of internal and external legal experts for almost four years. The result is clear: the allegations are groundless,” Hiltrud Dorothea Werner, Volkswagen’s board member in charge of integrity and legal affairs, said in a statement emailed to The Washington Post. “Volkswagen AG therefore remains confident that it has fulfilled all its reporting obligations under capital markets law. If there is a trial, we are confident that the allegations will prove to be unfounded. Furthermore, the presumption of innocence applies until proven otherwise.”

Volkswagen’s Executive Committee of the Supervisory Board had considered the possibility of such charges and will meet immediately “to discuss next steps in light of the indictments,” a spokesman for the board said in a statement emailed to The Post. The auto giant’s shares were down more than 1.6 percent in midday trading.

In September 2015, the Environmental Protection Agency discovered Volkswagen had for years rigged millions of diesel cars with cheat devices that allowed them to test as low emission, when in fact their output was 40 times the legal U.S. limit. Winterkorn resigned shortly after the scandal became public.

Volkswagen’s shares shed as much as 37 percent of their value after the scandal broke, and the company has been weighed down with legal trouble ever since. In June 2016, Volkswagen paid $14.7 billion to settle shareholder claims tied to the scandal, in one of the biggest class-action settlements in U.S. history. In January 2017, Volkswagen paid $4.3 billion in criminal and civil fines after pleading guilty in a case brought by the U.S. Justice Department. It was the first time the company had pleaded guilty to criminal conduct in court.

In May, Volkswagen’s chief financial officer revealed that the scandal had cost the company 30 billion euros ($33 billion). He also said another 1 billion euros had been set aside for ongoing legal costs.

Volkswagen and Winterkorn also face a civil suit from the U.S. Securities and Exchange Commission for raising more than $13 billion from investors in the bonds and securities markets between April 2014 and May 2015, while senior executives covered up the emissions scheme. Volkswagen contends the lawsuit is “legally and factually flawed” and accused the SEC of “piling on” years after the company assumed culpability.