Markets were heading higher on Monday as news was released that Citigroup (C) has agreed to pay $7 billion in a step to settle a U.S. investigation against them. This settlement will go on record as the largest penalty delivered by the U.S. Justice Department. The probe was diving into whether or not the company sold faulty mortgage-backed securities during the financial crisis. The total nearly doubled what many analysts were predicting. Citigroup said that they would be paying $4.5 billion in cash and give $2.5 billion in help to low-income tenants and those struggling with their homes. U.S. Attorney General, Eric Holder, said, “The penalty is appropriate, given the strength of the evidence of the wrongdoing committed by Citi. Despite the fact that Citigroup learned of serious and widespread defects among the increasingly risky loans they were securitizing, the bank and its employees concealed these defects.”
Volkswagen reported that they have plans to begin building SUV’s in Chattanooga, TN. This will bring an additional 2,000 jobs to their factory. The German based company said they will invest $600 million in efforts to expand the factory. They have also announced their plans to employ 200 new engineers that will work at a new research center. Martin Winkerkorn, chairman of Volkswagen AG’s management board said, “The Volkswagen brand is going on the attach in America.” He continued to say they have a goal of selling 800,000 Volkswagen brand vehicles in the United States by 2018.
Shares of Aecom Technology Corp. (ACM) were jumping up over 9% after the company announced it would be buying URS Corp. (URS) in a deal that will total $4 billion in cash and stock. The deal balances out to $56.31 per share, which was 8% over Friday’s closing price, but nearly 19% over the company’s average share price over the past 30 days. Throughout the past few years, the two companies have worked together on several projects. Aecom is an engineering design company, while URS provides engineering, construction and technical services to companies and federal agencies. The deal is expected to close in October and was unanimously approved by both companies.