Dieselgate Scandal

Carmakers stuck between rock and a hard place

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Daimler snitched first. Picture source: Reuters

The Bible says that confession is good for the soul, but it could prove to be a costly mistake for two of Germany’s largest carmakers caught up in the unfolding diesel scandal.

The financial supervisory authority, BaFin, said Monday that it is investigating whether VW Group and Daimler violated corporate law by failing to inform their investors in a timely way about confessions they made to the EU antitrust office about cartel behavior by the country’s automakers.

The law requires corporations to make a mandatory disclosure to shareholders when events take place that will materially affect a company’s share price. Similar rules exist in the United States and elsewhere and are designed to prevent insiders from trading on confidential information.

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