VW must face U.S. investor lawsuit in emissions scandal
By David Shepardson
WASHINGTON (Reuters) - Volkswagen AG (VOWG_p.DE: Quote) and former Chief Executive Officer Martin Winterkorn must defend an investor lawsuit in California over the company's diesel emissions cheating scandal, a U.S. judge has ruled.
The plaintiffs, mostly U.S. municipal pension funds, have accused VW of not having informed the market in a timely fashion about the issue as well as understating possible financial liabilities, according to the 41-court document seen by Reuters.
The pension funds include those representing Arkansas State Highway Employees and Miami Police. The lawsuits said VW's market capitalization fell by $63 billion after the diesel cheating scandal became public in September 2015.
The plaintiffs had invested in VW through American Depositary Receipts (ADR), a form of equity ownership in a non-U.S. company that represents the foreign shares of the company held on deposit by a bank in the company's home country.
"Volkswagen is convinced that the accusations raised by buyers of the corporate securities (so-called American Depositary Receipts) lack any foundation," a spokesman at VW's German headquarters said by email.
"It's our intention to make this clear in the further course of proceedings," he added.
VW shares did not react to the latest legal developments and were trading up 0.7 percent at 139.7 euros as of 1115 GMT (6:15 a.m. ET).