Ex-VW Engineers Charged With Insider Trading on Rivian Venture
AI Summary
Two former Volkswagen engineers were arrested for insider trading related to a $5 billion joint venture with Rivian Automotive. They allegedly profited significantly from confidential information about the deal, which led to a substantial rise in Rivian's stock price following the announcement. The case highlights ongoing concerns about insider trading practices in the financial markets.
(Bloomberg) -- Two former Volkswagen AG engineers were arrested for insider trading over bets they placed ahead of the German carmaker’s announcement of a $5 billion joint venture with electric-vehicle maker Rivian Automotive Inc.
Federal prosecutors released an indictment Friday charging the two engineers, Michael Stamp and Michael Plank, with conspiring to use confidential information they accessed through their jobs at Volkswagen about joint venture negotiations with Rivian.
Volkswagen and Rivian announced the deal on June 26, 2024, giving Rivian a financial lifeline as manufacturers large and small began to rethink strategies in a slowing market for electric vehicles.
Prosecutors said Stamp made $250,000 after Rivian’s stock price jumped 23 percent following the announcement, while Plank made $50,000. Plank is also accused of giving the information to a close family member who made $12,000, according to the indictment.
Prosecutors said internet searches made around the time the venture was unveiled show the two men knew their conduct was illegal, with Stamp searching for “statute of limitations insider trading” eight days before the announcement and Plank’s close family member searching in German “how is insider trading prosecuted?” afterwards.
“When people misuse confidential information for their own financial gain, they undermine the principles that allow our markets to function fairly and efficiently,” Manhattan US Attorney Jay Clayton said in a statement. “Insider trading is a crime that New Yorkers want pursued with vigor.”
Stamp, 31, and Plank, 45, both of San Jose, California, were charged with conspiracy and securities fraud and face as much as 25 years in prison if convicted of the most serious counts. They are scheduled to appear in federal court in California later today. Lawyers for the two men couldn’t be immediately identified.
The case is US v Stamp, 26-cr-316, US District Court, Southern District of New York.
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