The “Voltswagen” April Fool’s Day prank has led to an investigation by the SEC.
What started out as a “humorous” advertising and marketing ploy could land German automaker Volkswagen in serious trouble with the federal government.
The Securities and Exchange Commission (SEC) is apparently looking into VW’s “Voltswagen” marketing stunt to determine if it hurt company stock prices and may have broken any U.S. securities laws, according to German news outlet Der Spiegel.
The incident in question dates back to March 29. As a sort of early April Fool’s Day prank (and marketing ploy), VW “accidentally” released a rough draft of a press release declaring the company was going to change its name to “Voltswagen” as part of a larger effort to promote its ever-growing line-up of electric vehicles (EVs).
This action was picked up by the worldwide automotive press and on March 30 VW issued an official press release to several news outlets, including the Associated Press, confirming the leaked statement from the day before.
This action resulted in VW’s stock price going up. At one point it was 12.5% above its price before the whole incident.
SEC looking at jump in stock price
VW of America President Scott Keogh took responsibility for the poorly received April Fools’ prank that wasn’t on April 1.
This is what caught the attention of the SEC, taking what many considered a fairly unfunny publicity ruse to a possible federal offense.
After the April Fool’s stunt failed in the eyes of the media and the public, VW issued a press statement saying the releases were actually part of a larger tradition in which companies often issue prank statements.
This one just meant to also focus the world’s attention on VW’s growing EV portfolio.
But public statements that affect stock prices usually don’t get an “April Fools” immunity. An SEC investigation could result in charges against the company.
Several news organizations, including The New York Times and Reuters, have asked for a comment from VW. So far, the company has declined to issue one.
Just one of many VW legal scandals
This is not the first time VW has gotten into trouble for the way it conducts its business.
Oh those wacky Germans!! As quickly as it got here, VW took it away: Voltswagen is the company that never was.
In October 2015, as Volkswagen struggled to deal with its diesel emissions scandal, new data raised questions about whether the automaker properly reported death and injury claims to U.S. regulators during the past decade.
A study by the financial advisory firm Stout Risius Ross Inc., found that Volkswagen of America reported nine times fewer deaths and injuries than the average of the 11 largest automakers operating in the U.S. market. Significantly, VW reported less than half as many incidents as either Fiat Chrysler or Honda, both of which have been fined for underreporting their own death and injury data.
Back in September 2015, the EPA accused the German maker of using a so-called “defeat devices,” software designed to fool government emissions tests, on a variety of luxury models from the Audi and Porsche brands. The feds charged VW took steps to cover up excess emissions on 482,000 vehicles sold in the U.S. during a 7-year period.
The end result was VW paying billions of dollars in fines to various governments around the world. The company also faced numerous consumer lawsuits that further cost the company money.
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