Consumers had already sued Volkswagen AG over the emission-test scandal when what may have been the first shareholder case was filed last week.
The German carmaker was accused in a case in federal court in Alexandria, Virginia, of scheming to defraud investors who say they paid artificially inflated prices for the company’s foreign shares while it cheated on vehicle emissions tests.
A Michigan pension fund alleges that holders of the company’s American depositary receipts lost hundreds of millions of dollars. The receipts fell 28 percent in the week after the scandal became public.
ADRs allow U.S. investors to buy shares in a foreign company through negotiable certificates issued by an American bank. The certificates represent a specified number of shares in a foreign stock that is traded on a U.S. exchange.
These holders may be the only U.S. investors able to collect on any claims against the car company. A 2010 decision by the U.S. Supreme Court may block most investors from recouping losses, said Salvatore Graziano, a partner at Bernstein Litowitz Berger & Grossmann LLP.
The justices held that U.S.securities law doesn’t protect foreign investors who buy stock in non-American companies on overseas exchanges. The ruling “enables VW to avoid billions of dollars” in potential payments to shareholders, Graziano said.
Volkswagen is already facing more than 80 federal lawsuits by customers alleging the company committed fraud by cheating on emissions tests, inducing them to pay more for their vehicles. Those lawsuits were filed as class actions representing all consumers in the U.S. or individual states who leased or bought the vehicles.
The investor suit was filed Friday by the City of St. Clair Shores Police and Fire Retirement System.
Jeannine Ginivan, a Volkswagen spokeswoman, declined to comment on the complaint.
The case is City of St. Clair Shores Police and Fire Retirement System v. Volkswagen AG, 15-01228, U.S. District Court, Eastern District of Virginia (Alexandria).
Bill & Melinda Gates Foundation Sues Petrobras PwC Over Bribery Scandal
The Bill & Melinda Gates Foundation Trust sued Petroleo Brasileiro SAand a unit of PricewaterhouseCoopers LLP over a multibillion-dollar bribery scandal that knocked tens of billions of dollars off the Brazilian oil giant’s market value.
The foundation seeks to recover losses on its investments, an amount to be determined at a trial, according to the lawsuit filed Friday in Manhattan federal court.
Petrobras already faces other investor lawsuits in New York over the scandal. U.S. District Judge Jed Rakoff in July ordered thata trial start no later than Feb. 1 on those claims.
Investors including the Gates Foundation say Petrobras executives published misleading financial statements and overstated the quality of internal controls during a multiyear money-laundering and bribery scheme.
Petrobras said the earlier lawsuits should be thrown out because the company was a victim of a plot run by contractors and “rogue” politicians with help from a few corrupt employees. Cash traded for political favors was stolen from the oil company, Petrobras said.
Petrobras didn’t immediately reply to an e-mailed request for comment on the Gates Foundation lawsuit.
The case is WGI Emerging Markets Fund LLC v. Petroleo Brasileiro SA, 15-cv-07568. U.S. District Court, Southern District of New York (Manhattan).
Comings and Goings
Greenberg Traurig LLP has added two shareholders.Glenn Newman, the former president of the New York City Tax Commission, has joined the firm as a shareholder in New York. Newman, who will focus his practice on tax planning and controversy matters involving state and local taxes, was a partner atRoberts & Holland from 1998 to 2002 before joining the tax commission. In addition, the firm has added three real estate attorneys in Austin, Texas. Carey Gunn Venditti joined as a shareholder, and Emily Jung and Jennifer Cook Purcell joined as associates. All three were previously at Winstead PC.
White & Case LLP hired Arlene Hahn as a partner in the firm’s global intellectual-property practice. Hahn, who was previously a counsel at Weil, Gotshal & Manges LLP, will also work with the firm’s mergers and acquisitions practice, advising clients on intellectual property and technology transactional matters.
Troutman Sanders LLP added Justin Barnes and Lara Garner as partners in its intellectual property practice in San Diego. Both lawyers, previously partners at Fish & Richardson, are IP litigators.
–With assistance from Sophia Pearson and Dawn McCarty in Wilmington, Delaware, Margaret Cronin Fisk in Detroit and Sabrina Valle in Rio de Janeiro.