SEC Actually Will Investigate Volkswagen Over April Fools’ Prank
Tim Healey, 30 April 2021
We began April talking about Volkswagen’s April Fool’s Day prank that went awry, and we end the month back on the same topic. Circle of life!
We’re back on that topic because the Securities and Exchange Commission is investigating what happened. We reported, way back at the beginning of the month, that the SEC might investigate. And now, we know that it will. The New York Times says Volkswagen did not deny reports from Der Spiegel and other German media outlets that it is under investigation by the SEC.
That’s because regulators tend to frown upon companies misleading stockholders, even if the company does so as part of an elaborate joke. As a reminder, Volkswagen initially told the press that the name change to Voltswagen was no prank and would really happen.
Apparently, German regulators aren’t going to bother with an investigation, despite similar rules in that country regarding honesty.
The paper of record also suggests that even if the SEC finds a violation, the penalty is unlikely to be severe, in part because shares continued to rise even after VW admitted it was all a prank done in the name of “fun”.
We don’t like to say we told you so…but we kinda told you so.
