Volkswagen investors fret prospect of huge fine

Investors concerned about the prospect of a massive criminal fine in the U.S. for Volkswagen Group drove down shares of the automaker's stock Tuesday morning.

Volkswagen shares traded in Germany fell 3.4% to 112.25 euros shortly after 8 a.m. ET.

The drop came after Bloomberg reported that the Department of Justice is "assessing how big a criminal fine it can extract from Volkswagen AG over emissions-cheating without putting the German carmaker out of business."

The prospect of a fine of epic proportions would come on top of a civil settlement negotiated with the Justice Department that is set to cost Volkswagen up to $14.7 billion.

With more than $32 billion in net liquidity, it would take an extraordinary fine to put Volkswagen anywhere close to insolvency. On top of its cash reserves and annual revenue of nearly a quarter-trillion dollars, Volkswagen could also borrow money to stay afloat in a crisis.

Still, investors weren't thrilled at the prospect of another hit to the pocketbook stemming from the German automaker's admission that it rigged some 11 million diesel vehicles worldwide with software to cheat emissions regulations.

The company had already agreed to buy back or fix vehicles in a sweeping compensation plan that must still be approved by a federal judge.

"Volkswagen continues to cooperate with the Department of Justice as we work to resolve remaining matters in the United States," Volkswagen said Tuesday in a statement.

A Justice Department spokesman declined to comment.

Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.