TL;DR
Justice Department Charges Two VW Engineers with Insider Trading for Buying Rivian Stock Before Joint Venture Announcement
Federal prosecutors arrested Friday two Volkswagen engineers in San Jose, California, and accused them of insider trading for purchasing Rivian shares before VW’s multibillion-dollar joint venture with the electric vehicle maker was publicly announced. Michael Stamp and Marcus Plank, both based in VW’s US operations, each face one count of federal securities fraud that carries a maximum sentence of 25 years in prison. The accusation, filed by the U.S. Attorney’s office for the Southern District of New York, alleges that the two men used confidential knowledge of the company, internally called Project Climb, to purchase Rivian stock in the weeks before the deal was revealed on June 25, 2024.
Stamp allegedly made approximately $250,000 in profits from his trading, while Plank made approximately $50,000, according to the indictment. A member of Plank’s family also bought Rivian stock and made about $12,000, prosecutors said. Rivian shares rose 23 percent on the day the joint venture was announced, rewarding anyone who had bought shares in advance.
The indictment includes details that suggest the defendants were aware of the legal risks. Supposedly wanted stamp”statute of limitations insider trading” on Google eight days before the joint venture was announced, according to prosecutors. A relative of Plank searched for the same phrase in German, according to the indictment.
Since then, the joint venture at the center of the case has become one of the largest partnerships in the auto industry. Originally valued at $5 billion, it has expanded to nearly $6 billion and is focused on developing software-defined vehicle architecture for VW’s next-generation cars, even as Rivian launches into the mass market with its R2 SUV. VW overtook Amazon as Rivian’s largest shareholder in May with a nearly 16 percent stake after a $1 billion stock purchase tied to a software milestone.
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The case is being prosecuted by the same SDNY office as accused a Google engineer of using insider information at Polymarket in May, as part of a broader federal push to go after corporate insiders who exploit non-public information in the technology and automotive sectors. Both defendants were arrested in San Jose and are expected to appear before Judge Katherine Polk Failla in the Southern District of New York. The case was announced by U.S. Attorney Jay Clayton, who has made insider trading enforcement a priority for the office.
