Volkswagen engineers have been charged with insider trading linked to the Rivian joint venture

The US Department of Justice has charged two Volkswagen engineers with fraud over an alleged trade deal between the German company and Rivian.

The lawsuit, filed Friday by the US 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 are said to have bought Rivian stock and options after learning that the EV maker and Volkswagen planned to form a joint venture – internally labeled “Project Climb” – but before the companies made any public announcements.

Rivian and Volkswagen announced plans for a joint venture on June 25, 2024, which will focus on developing electric vehicle design and software. Volkswagen initially committed to investing $5 billion in Rivian, and the capital will be released as the companies achieve certain milestones. The joint venture has grown to $5.8 billion, and Volkswagen is now Rivian’s largest shareholder.

Rivian’s stock price rose 23% following the initial announcement in June. Stamp and Plank then sold their Rivian positions, with Stamp realizing about $250,000 in profits, Plank realizing about $50,000, and a close family member of Plank realizing about $12,000, as described in the lawsuit.

“Michael Stamp and Marcus Plank’s alleged exploitation of their employer’s confidential information allowed them to make more than $300,000 in profits,” U.S. Attorney Jay Clayton said in a statement Friday. “When people misuse private information for financial gain, they undermine the principles that allow our markets to function fairly and efficiently. Insider trading is a crime that New Yorkers want to be prosecuted vigorously. Its effects are disruptive to the financial system, harming ordinary investors and eroding public confidence. Today’s charges underscore the commitment of this Office and our laws that protect our law enforcement partners from holding the integrity of our market enforcement partners to enforce integrity. of those who cooperate with the maintenance of the law.”

Investigators said the two engineers understood their actions were illegal. Eight days before the joint venture was announced, Stamp investigated “the insider trading restrictions system,” and a close family member of Plank’s demanded, in German, “how is insider trading prosecuted?”, according to the lawsuit.

The pair, who live in San Jose, were arrested Friday and will appear in the US District Court for the Northern District of California. The case was assigned to US District Judge Katherine Polk Failla. Stamp and Plank face up to 25 years in prison if convicted of federal securities fraud.

TechCrunch has reached out to Rivian and Volkswagen for comment and will update the article if either company responds.