The US Department of Justice has charged two Volkswagen engineers with securities fraud over an alleged insider trading scheme linked to the German carmaker’s joint venture with Rivian.
The indictmentunsealed 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 by using confidential insider information. Stamp and Plank reportedly bought Rivian stock and options after learning that the electric vehicle maker and Volkswagen planned to form a joint venture – internally codenamed “Project Climb” – but before the companies made any public announcements.
Rivian and Volkswagen announced plans for the joint venture on June 25, 2024, which will focus on the development of electric vehicle architecture and software. Volkswagen initially committed to investing $5 billion in Rivian, with the capital released as the companies hit certain milestones. The joint venture has since grown to $5.8 billion, and Volkswagen is now Rivian’s largest shareholder.
Rivian’s share price rose 23% after the initial announcement in June. Stamp and Plank then allegedly sold their positions in Rivian, with Stamp realizing about $250,000 in profits, Plank realizing about $50,000 and Plank’s close family member realizing about $12,000, the indictment described.
U.S. Attorney Jay Clayton said in a statement Friday:
Michael Stubb and Marcus Plank’s alleged exploitation of their employer’s confidential information allowed them to reap more than $300,000 in illegal profits. When people misuse inside 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 continue with vigor. Its effects ripple through the financial system, hurting ordinary investors and eroding public confidence. Today’s charges underscore the commitment of this Office and our law enforcement partners to protect the integrity of our markets and hold accountable those who choose to break the law.
Investigators claim the two engineers understood their actions were illegal. Eight days before the joint announcement, Stamp searched the “statute of limitations on trade” and the close family member of Plank searched, in German, “how is insider trading prosecuted?”, according to the indictment.
The couple, who both live in San Jose, were arrested Friday and will appear in the U.S. District Court for the Northern District of California. The case has been assigned to U.S. District Judge Katherine Polk Failla. Stamp and Plank faces up to 25 years in prison if convicted of federal securities fraud.
Rivian declined to comment. A Volkswagen spokesman said the company is aware of today’s Justice Department action involving two individuals.
“The action focuses on specific individuals and does not include allegations against the company,” a Volkswagen spokesman said in an emailed statement. “As this is an ongoing matter, we are unable to comment further.”
Article updated to include Volkswagen’s comment.
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