The U.S. Department of Justice has filed charges against two engineers from Volkswagen for alleged insider trading related to the company’s collaboration with Rivian.
The charges, which were made public on Friday by the U.S. District Attorney for the Southern District of New York, claim that Michael Stamp and Marcus Plank profited over $300,000 through the use of confidential information. They reportedly purchased Rivian stock and options after learning about the upcoming joint venture — known internally as “Project Climb” — but before any official announcement was made.
Volkswagen and Rivian revealed their joint venture plans on June 25, 2024, aimed at developing electric vehicle technologies and software. Volkswagen committed an initial investment of $5 billion, contingent upon achieving certain benchmarks, which has now increased to $5.8 billion, making Volkswagen Rivian’s largest stakeholder.
Following the public announcement in June, Rivian’s stock value surged by 23%. Allegedly, Stamp and Plank sold their Rivian stocks, with Stamp earning approximately $250,000 in profits, Plank around $50,000, and a family member of Plank obtaining about $12,000, as stated in the charges.
U.S. Attorney Jay Clayton commented on the charges:
The alleged actions of Michael Stamp and Marcus Plank in exploiting confidential details from their employer resulted in over $300,000 in unlawful gains. Misusing private information for personal benefit disrupts the fairness and efficiency of our financial markets. Insider trading is a serious crime that requires robust prosecution, as it undermines trust among investors and within the financial system.
Investigators suggest that the two engineers were aware of the illegality of their actions. Just eight days before the joint venture announcement, Stamp searched online for “statute of limitations insider trading,” while a family member of Plank queried in German about the prosecution of insider trading, according to the indictment.
Both engineers, residing in San Jose, were arrested on Friday and are scheduled to appear in the U.S. District Court for the Northern District of California, under Judge Katherine Polk Failla. If found guilty of federal securities fraud, they face a potential sentence of up to 25 years in prison.
Rivian opted not to comment on the situation. A spokesperson from Volkswagen acknowledged awareness of the Department of Justice’s actions regarding the individuals involved.
“The investigation focuses on specific individuals and does not involve any allegations against the company,” the Volkswagen representative stated in an email. “As this is an ongoing situation, we cannot provide further comments.”
This article has been updated to include comments from Volkswagen.
