The U.S. Department of Justice has charged two Volkswagen engineers with securities fraud over an alleged insider trading scheme related to the German automaker’s joint venture with Rivian.
the accusationrevealed Friday by the U.S. Attorney for the Southern District of New York, alleges that Michael Stamp and Marcus Plank made more than $300,000 using confidential inside information. Stamp and Plank reportedly purchased Rivian stock and options after learning that the electric vehicle maker and Volkswagen were planning to form a joint venture, internally codenamed “Project Climb,” but before the companies made public announcements.
Rivian and Volkswagen announced plans for the joint venture on June 25, 2024, which would focus on the development of electric vehicle architecture and software. Volkswagen initially committed to investing $5 billion in Rivian, with capital to be released as the companies reach certain milestones. Since then, the joint venture has grown to $5.8 billion and Volkswagen is now Rivian’s largest shareholder.
Rivian’s share price rose 23% following the initial announcement in June. Stamp and Plank then allegedly sold their positions in Rivian, with Stamp making about $250,000 in profits, Plank making about $50,000, and a close relative of Plank making about $12,000, as detailed in the indictment.
“Michael Stamp and Marcus Plank’s alleged exploitation of their employer’s confidential information enabled them to obtain more than $300,000 in illegal profits,” U.S. Attorney Jay Clayton said in a statement Friday. “When people misuse confidential information for their own financial gain, they undermine the principles that allow our markets to function fairly and efficiently. Insider trading is a crime that New Yorkers want to pursue vigorously. Its effects ripple throughout the financial system, harming ordinary investors and eroding public trust. Today’s charges underscore the commitment of this Office and our law enforcement partners to protecting the integrity of our markets and holding accountable those who They decide to break the law.
Investigators allege that the two engineers understood their actions were illegal. Eight days before the joint venture was announced, Stamp searched for “insider trading statute of limitations” and a close relative of Plank searched, in German, for “how is insider trading prosecuted?”, according to the indictment.
The couple, who live in San Jose, were arrested Friday and will appear in the United States District Court for the Northern District of California. The case has been assigned to U.S. District Judge Katherine Polk Failla. Stamp and Plank face up to 25 years in prison if convicted of federal securities fraud.
TechCrunch has reached out to Rivian and Volkswagen for comment and will update the article if either company responds.
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