Volkswagen April Fool’s Joke Backfires, Ends in Class Action Lawsuit

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An April Fool’s joke in which Volkswagen executives pretended the company was changing its name to “Voltswagen” — and then got sued for it — has left nobody laughing.

In a class action lawsuit filed late April, Volkswagen investors accused the auto manufacturer of violating the Securities Exchange Act by artificially inflating its stock price with the fake news, Law360 reports.

On March 29 this year, news outlets got a copy of a draft statement that said Volkswagen was changing its name to Voltswagen to promote its electric car fleet, investor Gerald Montag’s initial complaint said. 

He said company insiders then confirmed the news, before the company published the news itself the next day, pushing up the stock price. However, the name change was simply an April Fool’s gag, dreamed up for publicity.

When a reporter eventually asked Volkswagen if the name change was in fact a joke, Volkswagen admitted it was, and the stock price dropped. 

“On this news, Volkswagen ADRs fell $2.14 per ADR, or over 5 percent, over the next two full trading days, to close at $35.58 per share on April 1, 2020, damaging investors,” the complaint reportedly states.

Montag sought to represent a Class of investors who bought Volkswagen securities on March 29 and March 30. 

He said, if investors who bought on those dates had known the name change was a joke, “they would not have purchased the company’s securities at the artificially inflated prices that they did, or at all.”

Recently, a California federal judge replaced Montag as lead plaintiff with investor Betty Jo Pheiffer, saying she suffered a greater financial loss from the gag.

According to court filings, Pheiffer bought 400 shares and suffered a loss of $912. 

This is not the only class action lawsuit the company is facing. A nationwide class action lawsuit filed in May also alleges that Volkswagen concealed a water pump defect in 25 models of its cars sold in the United States, which its customers then had to pay to get fixed themselves.

In that class action, Plaintiffs Michael Zhao and Dean Marriott allege Volkswagen USA broke federal warranty laws and state consumer laws in its actions regarding a “latent defect.”

What do you think of Volkwagen’s gag-gone-wrong? Let us know in the comments!

Pheiffer is represented by Jennifer Pafiti of Pomerantz LLP.

The Volkswagen April Fool’s Class Action Lawsuit is Gerald M. Montag v. Volkswagen AG et al., Case No. 2:21-cv-03678, in the U.S. District Court for the Central District of California.

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