Volkswagen engineers charged with $300,000 insider trading scheme
What's the story
The US Department of Justice has charged two Volkswagen engineers, Michael Stamp and Marcus Plank, with securities fraud. The charges stem from an alleged insider trading scheme tied to a joint venture between Volkswagen and electric vehicle maker Rivian. The indictment was unsealed by the US District Attorney for the Southern District of New York on Friday.
Fraud details
Stamp and Plank bought Rivian stock options
The indictment alleges that Stamp and Plank made over $300,000 using confidential insider information.
They are accused of buying Rivian stock and options after learning about the planned joint venture, codenamed "Project Climb," but before any public announcement.
The companies officially announced their partnership in June 2024, with Volkswagen pledging to invest $5 billion in Rivian as they hit certain milestones.
Venture expansion
Joint venture's value now at $5.8B
The joint venture's value has now grown to $5.8 billion, making Volkswagen Rivian's largest shareholder.
Following the announcement in June, Rivian's stock price surged by 23%.
Stamp and Plank then allegedly sold their Rivian positions with Stamp making about $250,000 in profits while Plank made around $50,000.
A close family member of Plank also made an estimated profit of around $12,000 from this insider information.
Legal proceedings
They could face up to 25 years in prison
Investigators allege that Stamp and Plank were aware their actions were illegal.
Eight days before the joint venture's announcement, Stamp searched "statute of limitations insider trading," while Plank's close family member searched in German "how is insider trading prosecuted?"
The two men have been arrested and will appear in the US District Court for the Northern District of California.
If convicted of federal securities fraud, they could face up to 25 years in prison.