The U.S. Department of Justice has filed securities fraud charges against two Volkswagen engineers. Prosecutors allege that the two men used undisclosed information to purchase Rivian stock and options before the joint venture plan between Volkswagen and Rivian was made public, and then sold them for profit after the announcement.
The lawsuit targets pre-joint venture deal.
The indictment was released by the U.S. Attorney's Office for the Southern District of New York. Prosecutors allege that the two defendants, Michael Stamp and Marcus Plank, both residents of San Jose, California, allegedly had prior knowledge of the planned joint venture between Volkswagen and Rivian within a project codenamed "Project Climb," and subsequently established related positions.
Rivian's stock price rose 23% after the announcement.
Volkswagen and Rivian announced their collaboration on June 25, 2024, focusing on the development of electric vehicle architecture and software. At the time, Volkswagen initially committed to investing $5 billion in Rivian, with funds to be released gradually as project milestones were achieved. Reports indicate that the collaboration has since expanded to $5.8 billion.
Following the announcement, Rivian's stock price surged by as much as 23%. Prosecutors stated that the two engineers subsequently sold their holdings. Stamp profited approximately $250,000, Plank profited approximately $50,000, and a close relative of Plank profited approximately $12,000.
The prosecution stated that both individuals were aware of the risks of breaking the law.
The indictment also lists some search records as evidence that the two had subjective knowledge of the matter. Prosecutors said that eight days before the joint venture announcement, Stamp searched for "statute of limitations for insider trading," while a close relative of Plank searched in German for "how insider trading can be prosecuted."
Reports indicate that the two men were arrested on Friday and will appear in the U.S. District Court for the Northern District of California. If convicted of federal securities fraud, they could face up to 25 years in prison. Rivian and Volkswagen have not yet publicly commented on the matter.
