Forecast published incorrectly: Financial regulator imposes million-dollar fine on VW

Volkswagen surprised investors in 2023 with an unexpectedly good forecast for the financial year. However, the Wolfsburg-based company only publishes them as a press release. The German financial regulator criticizes this.

The German financial regulator has fined the car manufacturer Volkswagen a million euros for violating publication obligations. VW AG should pay 1.2 million euros, as the Federal Financial Supervisory Authority (Bafin) announced. The Bonn authority therefore objects to the way VW published its forecast for the financial year on March 3, 2023.

According to Bafin's assessment, the outlook was well above market expectations. VW should therefore have immediately communicated the business development reflected in this on an “ad hoc” basis - i.e. in a particularly conspicuous manner for market participants on the financial markets. “Instead, the company simply published this inside information in a press release,” it said.

Volkswagen accepted the fine. A company spokesman said the corresponding decision was the result of an agreement between Volkswagen AG and Bafin to end the proceedings. Regardless of the agreement made, Volkswagen AG remains of the legal opinion that it has complied with its publication obligations and that all market participants have been sufficiently informed by the publication of the press release.

In Germany, listed companies are subject to the so-called ad hoc disclosure requirement. This means that non-public insider information that could have a significant impact on the share price must be published immediately ("ad hoc"). According to Bafin, this also includes a significant deviation of the business figures from market expectations.

The ad hoc disclosure requirement is part of the Market Abuse Regulation. If a company violates this, Bafin can punish this with a fine of up to a maximum of 2.5 million euros or up to two percent of sales. According to Bafin, the fine against Volkswagen was set on October 1st. The VW management's optimistic outlook surprised investors during ongoing stock market trading: the Wolfsburg-based company's Dax-listed shares had soared by more than ten percent that day.