We hear this from the Executive Committee of the VW oversight board:
Note how they discuss the Chairman, his resignation and the issue of what he
knew about cheating on emissions tests. Investigation of this matter is
apparently only beginning but the Board already comes to conclusions
about the Chairman's knowledge.
How about the lawyers?
While VW stock is traded in Germany, and not in the United States, the
company also has "American Depository Receipts" (ADRs) that are traded
in the United States (ADRs can be converted into VW stock and trade similarly
to the stock). This means that the company is a 1934 Act reporting company
with respect to the ADRs and its lawyers who work on disclosure to the ADR
investors are subject to SOX 307, including mandatory up the ladder reporting
under the statute and SEC rules. Lawyers who work only on disclosures made
to the investors in the stock traded in Germany, however, presumably are not
subject to SOX or other US rules. Also, the lawyers working on disclosures to
the ADR holders may say that they relied on disclosure documents prepared by
other lawyers responsible for disclosures to holders of the underlying stock
subject only to German law.
All of the VW lawyers may deny that they knew anything about what was
going on with the emissions tests. But is this plausible? If some of them did
know, what were their professional obligations?
Some of the best securities plaintiffs lawyers in the US are already looking
into all of this:
What should the corporate lawyers have done to prevent it from happening?
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