The fallout from Volkswagen's emissions scandal was propelled to new heights when institutional investors filed a $3.6 billion suit against the company in Germany's Regional Court in Brunswick in mid-March. For months, Volkswagen has been responding to allegations and legal actions arising as a result of its "Clean Diesel" engines not performing as advertised. Volkswagen defrauded consumers by equipping some vehicles with technology designed to falsely represent the outcomes of emissions tests.
Volkswagen claims that employees in the powertrain division of the company perpetrated this fraud in order to subvert emissions standards worldwide. However, the company's CEO, Martin Winterkorn, has already been forced to resign, along with other high-ranking members of the company's leadership, in response to this crisis. The company is mired in an array of suits brought by numerous stakeholders and countries, including the U.S. Department of Justice.
This new civil action is the first suit brought for over $1 billion in connection with this scandal and was brought on behalf of institutional investors from a number of countries that allege the automaker breached its duty by misleading investors as to the emissions produced by Volkswagen's diesel engines. The firm, TISAB Rechtsanwaltsgesellschaft mbH, represents this class, and the class has gained the support of a funding association that includes Grant & Eisenhofer PA and Kessler Topaz Meltzer & Check LLP. The company maintains that it acted in compliance with disclosure laws by apprising investors of the emissions fraud in a timely manner. An investigation into the matter is ongoing, with a preliminary report expected by the end of April.
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