Prosecutors in Stuttgart say they are investigating the chief executive of Volkswagen, Matthias Mueller, in connection with the emissions scandal that erupted at the firm in late 2015.
It is the first time he has been named in connection with official investigations into the affair.
His predecessor, Martin Winterkorn, and the current VW chairman, Hans-Dieter Poetsch, are also under scrutiny.
Mr Mueller became VW chief executive after the scandal broke.
However, at the time he was a board member of Porsche SE, the holding company which owns a majority of voting shares in the Volkswagen Group.
He was also chief executive of the Porsche sports car business, a subsidiary of the VW Group and Porsche SE.
The investigation is not looking into the causes of the scandal itself, but at how the board of Porsche SE, including Mr Mueller, responded to it.
Prosecutors suspect that executives deliberately delayed releasing information to investors about the scale of the scandal, as well as its financial consequences.
A similar investigation, into possible market manipulation by executives within the VW Group, was launched in Volkswagen’s home state of Lower Saxony last year.
In the wake of the scandal, Volkswagen’s share price dropped dramatically. Investigators are examining whether executives knew about the magnitude of the unfolding scandal – which began in the US – but failed to inform the markets in a timely manner.
As a rule, executives are expected to keep investors updated as soon as potentially price-sensitive information comes to light.
Porsche SE said the allegations were unfounded, adding it had complied with disclosure rules.
The holding company is based in Stuttgart. It is owned by the Porsche and Piech families – descendants of Ferdinand Porsche, the man who designed the Volkswagen Beetle and founded the sports car business that bears his name.