Pomerantz Appointed Lead Counsel in Volkswagen Securities Litigation

On July 21, 2021, U.S. District Judge Mark C. Scarsi of the Central District of California appointed Pomerantz LLP as Lead Counsel on behalf of Betty Jo Pheiffer, the Lead Plaintiff in Montag v. Volkswagen AG, No. 21-cv-3678 (C.D. Cal.), a securities action brought on behalf of a class of defrauded investors concerning allegations that Volkswagen AG (“Volkswagen” or the “Company”) had misled investors in regard to the true nature of its rebranding as “Voltswagen” as just an April Fool’s Day joke.

Volkswagen is one of the world’s largest manufacturers of automobiles and commercial vehicles.

Allegations against Volkswagen include that: (i) Volkswagen of America, the North American operational division and subsidiary of the Company, had never intended to rebrand itself “Voltswagen” in the U.S. as part of the Company’s purported electric vehicle (“EV”) initiative; and (ii) the foregoing conduct subjected the Company to increased regulatory scrutiny and oversight.

On March 29, 2021, Volkswagen of America issued a press release, purportedly by mistake, dated April 29, 2021, wherein Volkswagen of America indicated that it was rebranding itself “Voltswagen” in the United States.

On March 30, 2021, pre-market, news sources reported that Volkswagen of America had confirmed reports that the Company was rebranding itself “Voltswagen” in the U.S. as part of the Company’s purported EV initiative.

On March 30, 2021 the Wall Street Journal published a “WSJ News Exclusive” titled “No, Volkswagen Isn’t Rebranding Itself Voltswagen: German car maker says announcement by its U.S. operation was supposed to be an April Fools’ gag[.]”  The Wall Street Journal article reported that “Volkswagen AG’s U.S. subsidiary said Tuesday the company would rebrand itself as Voltswagen of America to promote its electric car strategy, but a spokesman for the parent company in Germany later said the move was a joke.” 

Then, on March 31, 2021, further reports were published regarding how Volkswagen, Volkswagen of America, and its spokespeople had purposefully misled reporters.  For example, ABC News published an article titled “An unwelcome prank: Volkswagen purposely hoodwinks reporters: Journalists are wary of looking out for pranksters around April Fool’s Day, but this time it came from a multi-billion-dollar corporation.”

On this news, Volkswagen’s American Depositary Receipt (“ADR”) price fell $2.14 per ADR, or over 5%, over the next two full trading days, to close at $35.58 per ADR on April 1, 2021.

Then, on April 29, 2021, news sources reported that the Securities and Exchange Commission was initiating a probe into Volkswagen’s botched April Fools’ prank.

On this news, Volkswagen’s ADR price fell $1.42 per ADR, or 4.29%, over the next two trading days, to close at $31.71 per ADR on April 30, 2021.