Oliver Schmidt, who led the German company’s US regulatory compliance office from 2014 to March 2015, was arrested on Saturday.
Volkswagen has admitted installing software on up to 11 million diesel vehicles sold worldwide, in order to circumvent tests for emissions while enabling them to release up to 40 times the permitted amounts of nitrogen oxides during driving. Lawsuits filed against Volkswagen by the states of New York and Massachusetts accuse Schmidt of playing a key role in the firm’s efforts to conceal its emissions cheating from US regulators.
Volkswagen agreed to cooperate with the investigation as soon as the scandal broke. But while it raises obvious questions about its compliance regime, it needs to heed the right legal advice regarding its next move.
For example, how should it be conducting its own internal investigation? Is there the potential to bring a private prosecution against some of its own employees? And how can it best mount a legal approach that minimises the charges faced or the punitive scale of any resolution reached with the authorities?