A U.S. judge on Thursday dismissed portions of a U.S. Securities and Exchange Commission lawsuit accusing Volkswagen AG (VOWG_p.DE) of defrauding American investors in connection with the automaker’s diesel emissions scandal.
U.S. District Judge Charles Breyer in San Francisco granted VW’s motion to dismiss claims it misled investors when issuing more than $13 billion of bonds and asset-based securities in 2014 and 2015.
The judge rejected as premature VW’s request to block the SEC from obtaining injunctive relief and to disgorge profits.
He also refused former VW Chief Executive Martin Winterkorn’s request to dismiss related SEC claims against him.
Volkswagen said it was pleased with the decision. “As this case proceeds, we intend to demonstrate that the SEC’s allegations are without merit,” the company said.
A lawyer for Winterkorn declined to comment. The SEC did not respond to a request for comment.
The case arose after VW was in 2015 caught using illegal software during U.S. pollution tests to make it appear its diesel vehicles met government emission standards.
That discovery triggered a global backlash that has cost the German automaker more than 29 billion euros ($34.4 billion), including $4.3 billion in U.S. criminal and civil fines in 2017.
VW has admitted to secretly installing the software in roughly 500,000 U.S. vehicles.
But regulators and investors have said it should have warned sooner about the breadth of the scandal. VW has said it underestimated the financial fallout.
Breyer agreed with VW that SEC claims based the ABS offerings must be dismissed because the Department of Justice had already settled them in connection with the 2017 settlement.
He also dismissed some claims that VW misled bondholders in financial statements and the risk of recalls.
Breyer said the SEC sufficiently argued Winterkorn knew VW was using false financial statements, and rejected his argument that some claims be dismissed because he ran VW from Germany.