New York, New York – Eighteen investment funds have joined the lawsuit against Porsche Automobil Holding SE (“Porsche SE”) and two of its former executives, Wendelin Wiedeking and Holger Haerter, asserting fraud and securities manipulation in relation to Porsche SE’s failed 2008 attempt to take over Volkswagen AG (“VW”).

With the addition of the new plaintiffs, the funds — now 35 in number — seek to recover more than US$2 billion dollars in losses suffered after Porsche SE allegedly triggered what The New York Times called “a short squeeze of historic proportions.”

The Amended Complaint, filed this morning in Manhattan federal court, explains in greater detail how Porsche SE manipulated the price of VW stock as it secretly cornered the market in VW shares. According to the Amended Complaint, Porsche SE hid that it was cornering the market in VW’s freely traded shares by repeatedly issuing misleading statements about its activities and by spreading purchases of call options around to several counterparties to avoid detection of its increasing control. The alleged scheme induced the plaintiff funds to establish short positions on VW stock. When Porsche SE suddenly revealed the extent of its true control of VW shares on October 26, 2008, a massive short squeeze ensued. The price of VW shares skyrocketed several hundred per cent, briefly topping 1,000 Euros. Investors who had shorted VW lost billions covering their positions in the squeeze.

The case is pending in the Southern District of New York, where it is captioned as Elliott Associates, L.P., et al, v. Porsche Automobil Holding SE, et al, No. 10-civ-532 (HB)(THK). The funds are represented by Bartlit Beck Herman Palenchar & Scott LLP (see www.bartlit-beck.com) and Kleinberg, Kaplan, Wolf & Cohen, P.C. (www.kkwc.com).

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