The situation may have put the company at risk of running afoul of US securities law by wading into the murky waters of potentially misleading investors.
“This is not the sort of thing that a responsible global company should be doing,” said Charles Whitehead, Myron C. Taylor Alumni Professor of Business Law at Cornell Law School.
On Wednesday, it released yet another statement explaining: “Volkswagen of America developed and implemented a marketing campaign to draw attention — also with a wink — to Volkswagen’s e-offensive” and the launch of its new ID.4 all-electric SUV in the United States.
But here’s the thing: People took the first, untrue statement about the name change seriously.
Wall Street analysts even released guidance about what such a change might mean for the carmaker’s strategic direction. Wedbush analyst Dan Ives said in a note to investors Tuesday morning that such a name change “underscores VW’s clear commitment to its EV brand,” and went on to detail the market opportunity for electric vehicles in the United States, Europe and China in the coming years.
“It’s a great illustration of the power of the media and the need to be really careful about what you say because you can never know what will or won’t move a market,” said Jonathan Richman, a partner at law firm Proskauer. “From Volkswagen’s point of view, this was supposed to be amusing, but one person’s amusement might be another person’s profit or loss.”
“Will the SEC inquire? Well, of course they will,” Whitehead said. “It’s gotten enough publicity and people are concerned about it and there are issues about whether or not companies should be doing this that I’m sure [the SEC is] going to make a phone call.”
A representative from Volkswagen’s headquarters said Wednesday afternoon the company had not been contacted by the SEC. The agency declined to comment on the matter.
Read More: Volkswagen could end up in hot water over its “Voltswagen” marketing stunt