Volkswagen Shares Fall on Fears of Bigger U.S. Penalty

[mahatmakanejeeves]

Source: The Wall Street Journal.

Business

Volkswagen Shares Fall on Fears of Bigger U.S. Penalty

Investors worry German auto maker could face bigger fine than $18 billion first estimated

By Aruna Viswanatha and Mike Spector
@aviswanatha
[e-mail]
@MikeSpectorWSJ
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Updated Jan. 5, 2016 10:35 a.m. ET

FRANKFURT— Volkswagen AG shares plunged Tuesday on speculation a U.S. Justice Department lawsuit could potentially cost the company tens of billions of dollars in penalties, significantly more than the $18 billion previously estimated.

The civil lawsuit reaffirms allegations environmental regulators made last year that Volkswagen installed “defeat” devices to dupe emissions tests in 580,000 diesel-powered vehicles sold in the U.S. It significantly ramps up pressure on the company by putting the case before a federal judge and formally seeking court-ordered penalties.

The speculation over the scale of the penalty hinges on wording in Justice Department’s suit, filed on behalf of the Environmental Protection Agency. The Justice Department cites four violations, which could result in fines between $2,750 to $37,000 per vehicle per violation. Analysts speculated on Tuesday that the government could seek four separate fines, with a much higher total than previously expected.

“This could lead to an upper level of $80 billion,” ING analysts said in a research note, but “the likelihood of the maximum fine being levied across each of the violations is unlikely.”

Read more: http://www.wsj.com/articles/volkswagen-shares-fall-on-fears-of-bigger-u-s-penalty-1452006491

[JustABozoOnThisBus]

1. It's still 30 above where it was in October

So it's not a complete collapse.

[cstanleytech]

2. Thats because regardless of the fact they broke the law they makes cars that

some people will probably still want to buy so they will recover.
Now imo the people who were involved in this fraud should also be forced to cover for it as well and if that means they have to loose their luxury homes or other assets and or retirement benefits to cover it then so be it.

[chapdrum]

3. Germany should nationalize

the m'f'er. Better yet, dissolve it.

“...the likelihood of the maximum fine being levied across each of the violations is unlikely.”

Of course it's "unlikely." That's coded language for as business as usual.