At the time of going to press, the VW emissions scandal has been unfolding, with a securities class action brought by purchasers of American Depositary Receipts in Virginia against the company, its operating division and its D&Os alleging that investors were misled by the company's failure to disclose its use of defeat devices in its products. An investor action has also been brought in the Netherlands under the Dutch collective action provisions. Regulatory civil and criminal proceedings and penalties in the US and Germany and potentially elsewhere are also likely to follow. Separately, a raft of consumer class actions brought by the purchasers of the cars which contained the defeat devices have been threatened and/or instituted in the US and elsewhere.
For D&O insurers the pattern of multiple civil claims and regulatory/ criminal investigations will be familiar territory, and key issues will be what senior management knew and when in order to determine whether conduct exclusions will bite and to ascertain exposure for defence costs. It is important to remember that this is a German company, governed by German corporate law and going forward, the market will be watching carefully to see whether VW's supervisory board is moved to bring a breach of fiduciary claim against its management board, and whether this German company will approach its dealing with regulators in a similar fashion to Siemens a number of years ago.
VW is being termed "the new Libor" by some commentators and elsewhere in our Review, we examine the current status of the benchmark proceedings and summarise the current UK regulatory landscape, and look at the current status of fidelity claims in the US and recent developments in the new Companies Law in the Middle East and weighted voting rights in Hong Kong, ending with our usual case summary round up.
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