The Securities and Exchange Commission claimed in a court case that Volkswagen had "committed a massive fraud" and repeatedly lied to US investors in connection with the so-called Dieselgate scandal.
"By obscuring the emission system, Volkswagen benefited from hundreds of millions of dollars in securities issued at more attractive rates for the company," the SEC said in a summary of its filing.
Volkswagen said the SEC complaint was "legally and factually flawed." Reuters reported that a lawyer for Winterkorn could not be reached early on Friday.
VW said in its annual report that the SEC could take enforcement action against the company against the involvement of the German automaker in the exhaust gas scandal.
The automaker said the agency "stacks," and the agency's complaint is unfounded.
The SEC has requested information from Volkswagen on potential breaches of the securities laws regarding certain investments that the company may have sold to investors. The agency is seeking evidence that the automaker did not disclose information about vehicles that did not meet US emission standards when issuing certain securities to investors.
The SEC can impose fines and other civil penalties for violations of securities law
One of the world's largest carmakers, Volkswagen, was shaken by reports that surfaced in 2015 for the first time that it was in emissions testing in the United States had been caught cheating. The ensuing scandal cost Volkswagen billions of dollars in compensation, forcing automakers to recall millions of vehicles.
Here is the full explanation from Volkswagen to CNBC:
The SEC complaint is legally and factually flawed, and Volkswagen will vigorously dispute it. The SEC has filed an unprecedented complaint about securities that have only been sold to experienced investors who have not suffered any damage and have received all interest and principal payments in full and on time. The SEC does not calculate that a person involved in issuing bonds knew that Volkswagen's diesel vehicles did not comply with US emission regulations when selling these securities, but merely repeated unsubstantiated claims about former CEO of Volkswagen AG, the was not involved in the sale. Regrettably, more than two years after Volkswagen entered the US Department of Justice, nearly every state, and nearly 600,000 consumers in multi-billion dollar landmark settlements in the United States, it has sought to pull more out of the company. 19659013] -Reuter contributed to this report.