Volkswagen has been fined €1.2 million by Germany’s Federal Financial Supervisory Authority (BaFin) for failing to meet mandatory financial disclosure requirements after issuing an earnings forecast for 2023 that significantly exceeded market expectations.
BaFin announced the penalty on Friday, saying Volkswagen AG should have immediately disclosed the business developments underpinning its forecast through an official ad hoc announcement, a mechanism designed to ensure that price-sensitive information reaches financial market participants promptly. Instead, the company published the information only in a press release, according to the regulator.
The fine was imposed on 1 October. Volkswagen retains the right to appeal the decision. The company had not immediately provided a statement in response to the penalty on Friday morning.
The case concerns events on 3 March 2023, when Volkswagen surprised investors during trading by presenting an optimistic outlook for the financial year. The company’s shares, which are listed on Germany’s DAX stock market index, rose by more than 10% that day.
Under German regulations, publicly listed companies must immediately disclose non-public information that could significantly influence their share prices. Known as ad hoc disclosure, the requirement is intended to ensure that investors receive material information promptly rather than allowing selected market participants to benefit from an informational advantage.
According to BaFin, the obligation also covers financial results or forecasts that differ substantially from market expectations. Volkswagen’s 2023 outlook fell into this category, the regulator said, making immediate disclosure necessary.
Instead of issuing the information through the required ad hoc channel, Volkswagen communicated it in a press release. BaFin determined that this did not satisfy the applicable disclosure obligations and imposed the financial penalty.
The requirement forms part of the European Union’s Market Abuse Regulation, which establishes rules governing the disclosure of inside information and seeks to protect the integrity of financial markets. Companies whose securities are publicly traded must comply with the rules when information meets the threshold for immediate disclosure.
Under the framework described by BaFin, violations of the ad hoc disclosure requirement can result in fines of up to €2.5 million or as much as 2% of a company’s turnover.
The €1.2 million penalty imposed on Volkswagen is below the maximum financial sanctions available under the rules. The regulator’s decision centres on the company’s handling of information about its financial outlook, rather than the subsequent movement in its share price.
The case highlights the distinction between communicating significant business information through a general corporate press release and publishing it through the formal disclosure mechanism required for price-sensitive information. According to BaFin, Volkswagen should have made the relevant information available to the financial market immediately through the latter procedure.
The penalty relates specifically to the company’s optimistic forecast for the 2023 financial year and the disclosure obligations arising from the business developments reflected in that outlook.
