The U.S. Department of Justice has charged two Volkswagen engineers with securities fraud for an alleged insider-trading scheme tied to the German automaker's joint venture with Rivian. The indictment, unsealed Friday by the U.S. District Attorney for the Southern District of New York, alleges that Michael Stamp and Marcus Plank made more than $300,000 by using confidential insider information about what was internally codenamed "Project Climb."

Stamp and Plank allegedly bought Rivian stock and options after learning that the EV maker and Volkswagen planned to form a joint venture - but before the companies made any public announcements. Rivian and Volkswagen announced plans for the joint venture on June 25, 2024, focusing on electric vehicle architecture and software. Volkswagen initially committed to invest $5 billion in Rivian, with the capital to be released as the companies achieve certain milestones. The joint venture has since grown to $5.8 billion, and Volkswagen is now Rivian's largest shareholder.

Rivian's stock price rose 23% following the initial announcement. Stamp and Plank then allegedly sold their Rivian positions, with Stamp realizing about $250,000 in profits, Plank about $50,000, and Plank's close family member about $12,000. "When people misuse confidential information for their own financial gain, they undermine the principles that allow our markets to function fairly and efficiently," U.S. Attorney Jay Clayton said in a statement Friday. "Insider trading is a crime that New Yorkers want pursued with vigor."

Investigators allege the two engineers understood their actions were illegal. Eight days before the joint venture was announced, Stamp searched "statute of limitations insider trading," and Plank's close family member searched, in German, "how is insider trading prosecuted?" The pair, who both live in San Jose, were arrested Friday and face up to 25 years in prison if convicted.