The U.S. Department of Justice has charged two Volkswagen engineers with securities fraud for an alleged insider-trading scheme connected to the German automaker\u2019s joint venture with Rivian.<\/p>\n
The indictment<\/a>, unsealed Friday by the U.S. District 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 allegedly bought Rivian stock and options after learning that the EV maker and Volkswagen planned to form a joint venture \u2014 internally codenamed \u201cProject Climb\u201d \u2014 but before the companies made any public announcements.<\/p>\n Rivian and Volkswagen announced plans for the joint venture<\/a> on June 25, 2024, which would focus on developing electric vehicle architecture and software. Volkswagen initially committed to invest $5 billion in Rivian, with the capital to be released as the companies achieve certain milestones. The joint venture has since grown to $5.8 billion, and Volkswagen is now Rivian\u2019s largest shareholder<\/a>. <\/p>\n Rivian\u2019s stock price rose 23% following the initial announcement in June. Stamp and Plank then allegedly sold their Rivian positions, with Stamp realized about $250,000 in profits, Plank realizing about $50,000, and Plank\u2019s close family member realizing about $12,000, as detailed in the indictment.<\/p>\n \u201cMichael Stamp and Marcus Plank\u2019s alleged exploitation of their employer\u2019s confidential information allowed them to make more than $300,000 in illegal profits,\u201d U.S. Attorney Jay Clayton said in a statement Friday.\u00a0 \u201cWhen people misuse confidential information for their own financial gain, they undermine the principles that allow our markets to function fairly and efficiently.\u00a0 Insider trading is a crime that New Yorkers want pursued with vigor. Its effects ripple through the financial system, harming ordinary investors and eroding public confidence.\u00a0Today\u2019s charges underscore the commitment of this Office and our law enforcement partners to protecting the integrity of our markets and holding accountable those who choose to violate the law.\u201d<\/p>\n Investigators allege the two engineers understood their actions were illegal. Eight days prior to the joint venture was announced, Stamp searched \u201cstatute of limitations insider trading,\u201d and Plank\u2019s close family member searched, in German, \u201chow is insider trading prosecuted?,\u201d according to the indictment. <\/p>\n The pair, who both live in San Jose, were arrested Friday and will appear in the U.S. District Court for the Northern District of California.\u00a0 The case has been assigned to U.S. District Judge Katherine Polk Failla.\u00a0Stamp and Plank face up to 25 years in prison if convicted of federal securities fraud.<\/p>\n TechCrunch has reached out to Rivian and Volkswagen for comment and will update the article if either company responds.<\/p>\n