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A new nationwide class action lawsuit says that Volkswagen executives artificially inflated stock prices in a gag marketing ploy that used the false name “Voltswagen” to emphasize the company’s focus on electric vehicles.
Lead plaintiff, Gerald Montag, claims in his complaint filed in California federal court Friday that investors were misled by the supposed joke that began on March 29 when a fake press release announced that the German automaker was changing its name.
Allegedly, several Volkwagen executives confirmed the fake name “Voltswagen” would be used for American operations and said the press release was “accidentally” leaked to the public. The executives backed up their contention by providing details about how the name change would work, for example, electric vehicles would have a “Voltswagen” badge and the company’s emblem would be changed from dark blue to light blue on the vehicles.
Montag also points out that the gag press release came out three days before the first of the month, April Fool’s Day, and had an effect on Volkswagen stock prices.
The supposed joke was revealed in an exclusive report in The Wall Street Journal late on March 30, says the class action. In the report, Volkswagen executives admitted there would be no name change; however, the buzz created by the gag had already affected stock prices, claims the class action.
Montag says that he and other investors were misled by Volkswagen’s early April Fool’s joke. The class action lawsuit points out that, though the company’s executives have been becoming more active on social media, they have not resorted to outlandish marketing stunts.
As additional reports condemning the ill-timed gag poured in, Volkswagen stock fell by over 5 percent by the time April Fool’s Day rolled around, alleges Montag. The false name gag and media fallout damaged investors claims the class action lawsuit and amounts to deception by Volkswagen executives.
Montag accuses Volkswagen of duping investors and violating securities regulations with the so-called gag. The plaintiff seeks to represent a nationwide Class of investors harmed by the April Fool’s Day drop in stock prices.
The class action lawsuit seeks to hold Volkswagen responsible for investor losses, along with attorney and court fees.
Did you buy stock based on Volkswagen’s false name gag? Did you lose money? Tell us what happened in the comment section below!
The lead plaintiff is represented by Laurence M. Rosen of The Rosen Law Firm, PA.
The Volkswagen False Name Gag Class Action Lawsuit is 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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