Volkswagen U. S.’s regulatory compliance officer has been arrested by the FBI, reports the New York Times:
The Federal Bureau of Investigation has arrested a Volkswagen executive who faces charges of conspiracy to defraud the United States, two people with knowledge of the arrest said on Sunday, marking an escalation of the criminal investigation into the automaker’s diesel emissions cheating scandal.
Oliver Schmidt, who led Volkswagen’s regulatory compliance office in the United States from 2014 to March 2015, was arrested on Saturday by investigators in Florida and is expected to be arraigned on Monday in Detroit, said the two people, a law enforcement official and someone familiar with the case.
I consider this a step in the right direction and I sincerely hope that the former president of Volkswagen U. S. follows him into the dock.
Either Sarbanes-Oxley should be enforced or repealed but regardless “I’m too incompetent to know what’s going on in the company I’m supposed to be running” should not be a valid defense.
Those two are the tip of the iceberg. The problem goes up to the people running Volkswagen in Germany. Probably can’t arrest the board members, but that’s a shame. While they don’t run the company on a day to day basis, they’re supposed to provide some oversight, and given that this is a fraud case that could bankrupt the company, at the very least they’ve failed in their fiduciary responsibility to NOT HIRE A BUNCH OF CROOKS!
I want as many people arrested and charged for this as they can convict. Get the Volkswagen US President, and some of the Germans.
Hopefully the arrests also go down to the engineers who implemented this. “I was just following orders” wasn’t a defense at Nuremberg and it shouldn’t be a defense now.
(Seriously, people have an obligation to not engage in obvious fraud)
I think the avenue to the board, ice, is failure to to disclose to shareholders the potential loss in equity value. An international, public company is a different animal than our small, private companies, but as a serial board member I can tell you unequivocally I would advocate some sort of information disclosure even if the true nature, scope and magnitude of the problem was still under investigation.