When it comes to market manipulation it's very hard to say what's legal and what's not, that's why investment banks have huge compliance departments who have immense expertise in these areas. It's unlikely Porsche had that kind of legal advice so could have accidently broken the law. The brokerage/advisory firms they used could also be liable, as regulated firms have an obligation to inform the regulator if they believe a client is commiting market manipulation.

I doubt anyone will do jail time for this, if even any laws were broken. And if Porsche settles for the maximum 1 million Euro fine, that's not even 1/1000th of the profits they made on the backs of the shorts. It's not like their aspiration to takeover VW was any kind of a secret in either the auto or finance worlds.

Frankly, I have no sympathy for market speculators who got reamed here by shorting VW. I do have some sympathy for people who were short the DAX index as a broad-based hedging strategy and got trapped by the leap in the DAX. Then again, "the market can remain irrational longer than you can remain solvent" is a true today as it was 75 years ago.